Houses under 5 billion in alleys attracting customers

Houses under 45 square meters in alleys, priced from 3 to 5 billion dong, are attracting many buyers, surpassing the subdued atmosphere of many real estate segments.

Mr. Son, a real estate broker specializing in residential properties in Hanoi, said that for the past two months, there has been continuous interest from people inquiring about buying houses in the alley segment. There was a week where he led nearly a dozen clients to view houses. With nearly 4 years of experience, Mr. Son noted that the focus of interest and transactions is on small houses ranging from 30-45 square meters, priced under 5 billion dong, located in alleys in districts such as Ha Dong, Hoang Mai, Hai Ba Trung, Dong Da... Newly built houses, offering good prices, with unobstructed locations and no feng shui issues, and with readily available paperwork, almost instantly attract buyers even when just newly listed.

"Although transaction volume is not yet at half the level of a bustling market, houses and land in alleyways in central districts still attract many inquiries, especially for properties priced between 3-5 billion dong per unit," Mr. Son said.

Mr. Manh Truong, a long-time investor specializing in acquiring residential properties in alleys, stated that despite the challenging market conditions where customers are tightening spending and becoming more selective, the demand for residential properties in Hanoi remains significant. Affordable houses, competing with apartments, even though they have small sizes and are located in alleys, still receive many inquiries from potential buyers. Earlier this year, he sold a 35-square-meter house for 3.4 billion dong in the Duong Noi area, Ha Dong district, with a profit margin of about 30% after two years.

A recent report from Batdongsan channel indicated that while many real estate segments are experiencing a slowdown, residential properties in Hanoi continue to witness growth. Prices and interest levels in this segment have increased by 2-9% compared to the same period last year. Specifically, detached houses in Tay Ho district saw the strongest price increase at 9%. Other districts such as Dong Da, Ha Dong, Hai Ba Trung, Hoang Mai also saw price increases ranging from 4-8%.

Furthermore, the level of interest in the Hanoi residential segment increased by an average of 2-3% compared to the second quarter of last year. Surveys conducted by this channel with residential real estate brokers also show that the segment of detached houses in Hanoi priced from 3 to 5 billion dong is experiencing the best transactions.

Explaining these developments, Mr. Pham Duc Toan, founder of EZ Property, noted that previously, houses in alleys were often considered alongside new apartments by potential buyers. However, according to someone with over 20 years of experience in managing brokerage units and project development, the sudden increase in apartment prices in both primary and secondary markets in recent times has prompted a group of customers to shift towards houses and land. With similar budgets, many buyers accept the inconveniences of alley houses with the mentality of "having both land and a larger usable floor area."

Mr. Tuan Anh, director of a residential real estate trading floor in West Hanoi, added that the vibrant market for houses and land in alleys in Hanoi is partly due to attracting mid-range investors with available funds who want to purchase for renovation or new construction before reselling. While the price fluctuation of alley houses is not as strong as other segments, it offers stability and is suitable for investors looking to accumulate assets. Mr. Tuan Anh believes that this year, real estate serving consumer needs, capable of generating cash flow, and easily liquidated will continue to be a priority choice for investors.

However, experts also note that the real estate market has experienced a significant price increase during the 2020-2021 period, and alley houses and land in Hanoi are no exception. Therefore, buyers need to thoroughly research prices from multiple sources; legal information such as planning, construction permits, and bank mortgages; amenities, living environment, and avoid risks such as houses without titles, shared titles, or handwritten or forged documents.

For investors, Mr. Pham Duc Toan suggests that if buying a house as a hedge against price declines, they need to determine long-term holding and prioritize convenient locations for generating rental income, as alley house prices usually do not increase significantly, especially in areas that have stabilized in terms of planning and population.

In addition to the points mentioned earlier, the trend of investing in houses under 5 billion in alleys reflects a broader shift in consumer preferences and market dynamics. Here are some further insights into this emerging trend:

• Affordability and Value: One of the primary drivers behind the growing interest in alley houses is their affordability compared to larger properties or apartments in prime locations. For many first-time buyers or investors, these smaller houses represent an entry point into the real estate market or an opportunity to diversify their investment portfolios without breaking the bank.

• Urban Lifestyle and Convenience: Despite their compact size and location in narrow alleys, these houses offer an urban lifestyle that appeals to certain demographics. The convenience of living close to city centers, amenities, and transportation hubs outweighs the perceived drawbacks of limited space and privacy for many buyers.

• Flexibility and Customization: Alley houses often provide buyers with the flexibility to renovate, expand, or customize their living spaces according to their preferences and needs. This level of customization is less feasible in larger apartment complexes or gated communities, where regulations and restrictions may limit alterations.

• Investment Potential: While alley houses may not experience rapid appreciation in value like upscale properties, they offer steady and relatively predictable returns on investment. Investors are attracted to the potential for rental income, especially in densely populated urban areas where demand for affordable housing remains high.

• Community and Heritage: Many alley neighborhoods have a rich cultural heritage and strong sense of community, which adds to their appeal. Buyers are drawn to the charm and authenticity of these historic districts, where they can experience the local culture and traditions firsthand.

• Adaptation to Changing Market Conditions: In the face of economic uncertainties and fluctuations in the real estate market, alley houses represent a resilient and adaptable investment option. Their stable performance and relatively low volatility make them attractive assets for both individual buyers and institutional investors seeking long-term growth and stability.

Overall, the increasing popularity of houses under 5 billion in alleys reflects a broader shift towards more pragmatic and value-driven investment strategies in the real estate market. As urban populations continue to grow and housing needs evolve, these properties are likely to remain a viable and sought-after option for buyers and investors alike.