Realty firms say rules forced them to build large condos

While strong investment in large-sized condos and the lack of mini apartments are blamed as the culprit of the imbalanced condo market, realty project developers said they had to build large apartments due to prevailing regulations.

Speaking at a seminar in HCMC on Monday, Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, pointed out a paradox in the real estate market with overabundance of high-class and large condos while there are not enough small-sized apartments for low-income earners.

One of solutions for the problem is to allow for investors of unsold large condo projects to split up the apartments, offering small-sized projects that fit the pocket of low-income earners. For example, Bao Gia Joint Stock Company has sought approval to split some penthouses of The Flemington project in HCMC’s District 11.

However, real estate companies said that they had to build large condos because of current regulations.

Nguyen Canh Ha, director of An Thien Ly Construction & Services Co. Ltd., said that enterprises did not overlook projects for low-income people to focus on high-class apartments.

“No one makes things that can’t be sold,” Ha said.

However, as per the general planning, each condo is presumed to accommodate four persons with the average housing space target abided by, enterprises have to build large-size apartments.

For a condo building with a total floor space of around 25,000 square meters and 1,000 residents, the investor has to build 250 condos measured at an average 100 square meters each given these regulations. If the investor builds certain 50-square-meter condos in such a project, there must be apartments of 150 square meters each to ensure the number of condos.

As a result, the investor may find it hard to sell large condos.

In fact, there are many condos that just one, two or three persons live in. Therefore, investors at Monday’s seminar suggested that each flat have an average number of only two persons.

Many enterprises also said that the 1:2:1 ratio, meaning 25% of condos being small-sized ones, 50% being medium-sized and 25% being large-sized units, is not suitable to market conditions any longer.

Therefore, such regulations should be removed, and how condos will be built should be driven by market factors, they said. - Source: Saigon Times