Property prices in the centre of Hanoi have soared, with huge premiums on development land
The seven shabby rooms that his family inhabit in the centre of Hanoi may not look like much, but Hoang Quoc Dinh is sitting on one of the most expensive slices of real estate in the world.
The combative 53-year-old businessman recently turned down an offer of 50bn Vietnam dong ($2.4m) for his family’s 53 square metre plot of land just south of Hoan Kiem lake. He will only sell his home to developer T&T New Times if he gets 67bn dong ($3.2m).
At about $60,000 a square metre, Mr Dinh’s asking price is more than the average paid for luxury apartments in London, Hong Kong and Tokyo, according to a recent survey by Knight Frank, an estate agency. His lofty demand has prompted allegations of greed in a country where income per head is just $1,200 a year.
Mr Dinh, who runs a machinery trading company, insists he is right to stand up to the developer, which has permission from the local government to develop a retail, office and residential project on a 4,000 square metre site that incorporates his property.
“Forget about everywhere else in the world, this is the going rate for downtown Hanoi,” he says in his cramped living room, as his wife trades stocks on the family computer behind him. “Big investors have a lot of power over the common people in Vietnam but if we know the law, we can fight back.”
Property prices have been soaring in central Hanoi. Although the city’s outer districts have been transformed by successive waves of construction, the government has licensed few large developments in the densely populated but still charming city centre. That has put a big premium on the available plots of land.
Economists have consistently warned that prices are spiralling out of control, with annual rental yields as low as one or two per cent. But the flood of people buying in the hope of capital appreciation has not abated.
The local government has ordered Mr Dinh and his family to sell their property to T&T. But he insists that the development is illegal and that they will not be forced from their once-elegant but now faded home.
Mr Dinh claims that security guards working for the developers are trying to intimidate him by playing loud music all day and lighting smoky fires.
Tran Hong Son, vice-chairman of T&T, denies the allegation. “The guards are bored so they play music loudly and I can’t control them,” he says. He accuses Mr Dinh of trying to hold the project to ransom.
Mr Dinh and his family will be evicted says Lam Quoc Hung, vice-chairman of the local people’s committee – as councils are known in Vietnam – though no date has been set.
He warned that if they are forced out, they will have to make do with the minimum statutory compensation, which would be about 10bn dong in this case.
Vietnam Politics 
Posted on April 19, 2011
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