Experts jeer overpriced small apartments

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  Residential buildings under construction at a newly developed area on the outskirts of Hanoi. Photo: AFP

The plan to build 25-square-meter apartments in Ho Chi Minh City is being criticized once again, with the Ministry of Construction proposing the government run a nationwide trial.

Experts say the construction may solve the housing shortage problem for a small number of people, but that it will hinder civil and urban development.

Experts from numerous fields have made their objections known to the ministry since May 2010, when it gave the go-ahead to the Dat Lanh Real Estate Company to build one hundred 20 sq.m. apartments in the southern hub.

More nays came after Minister Trinh Dinh Dung spoke at a recent meeting with the Ho Chi Minh City Real Estate Association where he has asked the government to allow more companies to run pilot construction projects for smaller apartments.

Professor Le Huy Ba, head of the Institute for Environmental Science, Engineering and Management at the Industrial University of HCMC, said small apartments will create problems in the future.

Ba said a 25 sq.m. apartment only provides enough space for one or two people, and thus would mainly be suitable for newlyweds.

But when the family grows, the apartment would be too small and they would try to extend the space in different ways, Ba said. Existing laws do not restrict the number of residents in a dwelling.

He said the problem of overcrowding already exists at many old small-sized apartments in Hanoi.

Buyers of small apartments tend to have relatively low incomes, often spending most or all of their savings to buy an apartment and are not likely to be able to afford switching to a larger house later, he said.

Ba said small apartment buildings will eventually turn into slums.

The immediate benefit from such projects is far less than the harm they will inflict on society later on, including on the owners of such apartments, he said.

The professor also expressed concern about the quality of life in small spaces.

He said 25 sq.m. apartments do not have enough room for basic activities and do not let in enough light or fresh air.

"It's necessary to meet housing demand, but not with such small apartments. We have to reconsider this plan. It's not living when people are stuffed into a box."

Vietnam's Housing Law requires that social apartments be at least 30 sq.m. and commercial apartments be at least 45 sq.m.

Nguyen Thanh Van, general director of First Quality Management and Consultancy Company in HCMC, also said that investing in small apartments amounts to "a step backwards."

He said small apartments, if any, should only be built for rent in industrial hubs with large populations of migrant workers such as Dong Nai and Binh Duong provinces.

"It should not be a trend in large, crowded cities."

Van said the property market is struggling, and if the plan is approved, every investor would build small apartments intended to sell fast, which would cause urban areas to be "chopped up into pieces."

He said the solution to housing demand should not be about size, but prices.

Under the pilot program, the Dat Lanh Company is selling its 20 sq.m. apartments for around VND300 million (US$14,400) per unit, or VND15 million per sq.m.

Van said that is not such a great deal considering that similar apartments at other projects are selling at VND12 million per sq.m., with investors still earning significant profits.

He said construction costs less than VND6 million per sq.m. and VND2 million for the land, so VND8 million would be the appropriate price.

"The final goal is to raise the living quality for people, thus policies must be instituted so that a majority of people can afford homes with lots of space."

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