In April 2024, Ms. Vu Thi Thanh sold a house in an alley on Nguyen Trai (Thanh Xuan, Hanoi) for 5.7 billion VND (brokerage fee of 300 million VND). Ms. Thanh bought this house in the first months of 2023 for 4 billion VND, minus the renovation costs and other brokerage fees, Ms. Thanh made a profit of more than 1 billion VND.
"Previously, to invest in a house in this alley, I borrowed gold from relatives, which was converted to nearly 30% of the house's value. The gold price at the time I borrowed was just over 60 million VND/tael, but now it has fluctuated around 80 million VND/tael.
If I buy gold and pay it off right away, the profit from selling the house won't be much, so I decided to pool money with acquaintances and continue to hunt for houses in alleys with good locations for short-term investment. I want to invest short-term because I see that the hotness of houses in alleys can be maintained this year" - Ms. Thanh shared.
Realizing that the alley house segment is attracting a lot of attention and has "real money", in August 2024, Ms. Thanh continued to invest with an acquaintance in a house in an alley in Tan Ap area (Ba Dinh, Hanoi). The house in the alley has an area of 30m2 and was bought by Ms. Thanh for 3 billion VND excluding transfer fees.
After closing the house for a while, Ms. Thanh posted the information on the floors for brokers to sell. After only a short time, the house in Ms. Thanh's alley had a customer who liked it and deposited money to close the house.
"Compared to the purchase cost, minus the brokerage fee, the cost of pushing new furniture into the house was 150 million VND, I made a profit of 350 million VND" - Ms. Thanh said.
According to a report by the Vietnam Association of Realtors (VARS), the single-family home market is forming a new price level due to increasing demand. A member of VARS, a real estate distribution floor in Hanoi, said that the number of single-family home transactions of this unit in the first quarter reached the highest level in the past 5 years.
Commenting on the reason for the increase in house prices in alleys, Mr. Nguyen Van Dinh - Chairman of VARS said that the reason is partly due to the high price of the apartment market, which has prompted a group of home buyers to change direction. Houses in alleys priced at 3-4 billion VND are of great interest because with a similar budget, to buy an apartment, one must move to an area far from the center and are increasingly scarce.
Demand for investment in this housing segment has also increased again. Mr. Dinh said that this segment has good liquidity with full legal documents, reasonable selling prices, and high rental yields in the context of abundant rental demand.
Along with that, the demand for renting space in alleys also tends to increase, as many small and medium-sized enterprises want to reduce space costs to sell goods through e-commerce platforms.
"House prices in the inner city will hardly decrease. Buyers with real housing needs should consider paying if they find a house that fits their financial capacity, meaning they don't have to borrow too much. Because, the history of price increases shows that, like apartments, residential land in Hanoi has been increasing continuously since the end of 2021 until now. During difficult market times, prices of this type have decreased but not significantly compared to the previous hot increase" - Mr. Dinh said.
