, pp.276-281 http://dx.doi.org/10.14257/astl.2018.150.62 An Analysis of Spatial Distribution of Hanoi Apartment Youseok Chung 1 and Saejoon Oh 2* 1 National Housing Organization JSC ITower 49 Pham Ngoc Thach St. Ho Chi Minh City, Vietnam, 2* Dept. of Real Estate & Finance, Changshin University 262 Palyongro MasanHoewon-gu, Changwon 51352, Korea 1 chung@nhojsc.vn, 2* saoh2@cs.ac.kr Abstract. This study helps potential customers to understand more about real estate market in Hanoi and provides helpful guidelines to its practitioners. It analyzes the differences between sold and unsold apartments and their characteristics in development before and after the financial crisis. The result shows that apartment buildings are developed alongside the roadway in Hanoi. The development pattern of apartment buildings after 2008 spreads to the southwestern part of Hanoi city alongside the 2nd and 3rd beltway and towards Ha Dong district. It seems that development timing and components of apartment buildings are the main reasons for the unsold apartment buildings. Keywords: Vietnam, Hanoi apartment, GIS, Kernel Density 1 Introduction The declaration of Vietnam's Doi Moi Policy, an economic reform in 1986, initiated the economic growth and industrialization [1-2]. After the withdrawal of US economic sanctions to Vietnam in 1994, the inflow of FDI(Foreign Direct Investment) on a large scale accelerated industrialization to achieve high growth[3-6]. By using Geographic Information System(GIS), this study spatially analysed the development trend and distribution patterns of apartment buildings in Hanoi, Vietnam, and spatial characteristics of both sold and unsold apartment buildings to find out their price affecting factors. It would provide investors and practitioners with necessary information in regards to spatial characteristics of apartment buildings in Hanoi. The information could be used as guidelines for future real estate investment and for city planning as well. The spatial range for an empirical analysis is restricted to apartment buildings in Hanoi, Vietnam. The time range is 187 apartment complexes for the period from 2000 to 2017. The characteristics of district, complex, price, and unit of apartment buildings were analyzed. By using ArcGIS 9.3, the spatial distribution patterns and trend of the data were examined. In addition, the average price of apartment buildings were com- * Corresponding Author ISSN: 2287-1233 ASTL Copyright 2018 SERSC
pared with the official land price, and their date of completion, completion of their sales, and business entity were thoroughly studied. 2 Related Researches Jung et al., (2013) [7] analyzed foreign investment patterns for real estates in Ho Chi Minh City, Vietnam. Based on GIS and Logistic Regression Model, they studied 180 apartment complexes in Ho Chi Minh City. The result showed that the foreign investment was focused on areas with potential growth power. They were equipped with neither social nor political networking. The areas were categorized: districts with highly priced apartment complexes in Ho Chi Minh City, District 2 & 7 with foreign investment, and other districts with local investment. Thu and Perera(2011) [8] investigated 113 Housing Development Projects in Ho Chi Minh City after the year 2006. Their results showed 46% of the units in the projects were sold in pre-sales(the installment plans) before final licensing procedure; 74% of the sold units is for actual use, and the rest is for resale purposes. It was reported that the real estate speculation continued in the area[6]. Only 5.67% of residential projects were completed as planned from the year 1996 to 2006 in Ho Chi Minh City. They argued that the expected income from land price increase was bigger than that from the Housing Project completion. 3 Spatial Analysis 3.1 Spatial Distribution Pattern of Apartment Buildings in Hanoi Before and after the Financial Crisis The apartment buildings before 2008 were mostly developed around the 1st and 2nd beltway towards west of CBD. For those developed after 2008, the standard deviation distance became 5.17km, as compared to 3.72km(before 2008), and showed they go further outside. In other words, it meant that the areas with high ratio of apartment price to official land price were developed. It showed that areas in southwest of CBD around the 2nd and 3rd beltway were developed. The bridge in 2nd beltway was completed in 2009, and 3rd beltway was extended in 2012 [9-10]. In addition, the new roadway to Ha Dong was completed in 2011 [11]. This helped the extended development of apartment buildings towards southwest (Figure 1). Copyright 2018 SERSC 277
Fig. 1. Distribution pattern before and after 2008 3.2 Spatial Distribution Pattern of Apartment Buildings with Unsold Units Figure 2 is the price map of apartment buildings in Hanoi by using Interpolation method. It is a cross map presenting 5 categories by the scale of the apartment complexes with both 100% sold units and unsold units: 146 sale completed apartment complexes, and 41 apartment complexes with unsold units. Sale completed complexes had average 413 units, an average price of 1,280USD/sqm (S.D: USD 485), and an average size, 104sqm. Those with unsold units had 861 units, an average price of 1,067USD/sqm (S.D: USD 349), and an average size, 97sqm. According to Nearest Neighbor method, all sold apartment complexes showed statistical significance in 99% degree of confidence, and its value of 0.63, lower than 1, revealed the clustering pattern of distribution. For those with unsold units, Nearest Neighbor value is 1.14, so that the null hypothesis(they were randomly distributed) couldn't be rejected, and showed neither dispersion nor clustering in patterns. 278 Copyright 2018 SERSC
Fig. 2. Distribution pattern of sales(green: Sold / Navy: Unsold) There were not much difference between completely sold apartment complexes and those with unsold units except their scales: similar in average unit size and average unit price of apartment complexes. According to Nearest Neighbor Analysis, those with unsold units didn't show spatial distribution patterns. This might be explained as the composition of apartment complexes(2 foreign investment, 39 local investment) or temporary oversupply due to development on a large scale. Further studies are needed to find more specific reasons for those with unsold units in Hanoi, Vietnam. Fig. 3. Figure 3. Apartment with all sold units(left) vs. Apartment with unsold units(right) Copyright 2018 SERSC 279
4 Conclusion This study tried to examine the spatial characteristics of apartment buildings in Hanoi by using ArcGIS. With GIS spatial analysis, it analyzed the differences in distribution patterns between the apartment buildings with sold units and those with unsold units in Hanoi, Vietnam. To investigate the spatial clustering and density of apartment buildings in Hanoi, the spatial pattern analysis was implemented. Nearest Neighbor and Kernel Density Analysis were used to find the spatial distribution patterns based on dot data presenting apartment building location. The result showed that apartment buildings in Hanoi, Vietnam, were developed alongside the roadway. After the year 2008, the development of apartment complexes in Hanoi was extended to the southwestern part of the city following the 2nd and 3rd beltway and to newly constructed Ha Dong roadway. It was expected that apartment buildings with unsold units showed special patterns, but Nearest Neighbor Analysis confirmed they didn't. It seemed that development timing and product composition(developed by local firms) were factors affecting their sales. Further studies are required. The apartment complexes on a large scale were mostly developed on the outskirt of the city. They were located in areas showing relatively high gap between sale price and official land price. As mentioned above, this study investigated the spatial price patterns of apartment buildings in Hanoi and confirmed they were constructed by following infrastructure of roadway. The apartment buildings in Hanoi were developed alongside the 1st, 2nd, and 3rd Beltway in a radial pattern, showing that the infrastructure of roadway in Hanoi, Vietnam, was a significant factor when planning for development of apartment buildings. As is often the case in GIS, this study drew a conclusion based on visual representation of geographical maps. Further studies with different analysis methods, such as spatial econometric analysis, are required to broaden its boundary. References 1. T. B. Nguyen, E. Krabben and D. A. Samsura, "Commercial Real Estate Investment in Ho Chi Minh City - A Level Playing Field for Foreign and Domestic Investors?," Habitat International Vol.44, pp.412-421 (2014) 2. D. Sillivan, "Graph-base Cellular Automation Models of Urban Spatial Process," Ph.D Dissertation, University College of London (2000) 3. T. T. Dao and D. T. T. Binh, "FDI and growth in Vietnam: a critical survey," Journal of Economics and Development, Vol.15, No.3, pp.91-116 (2013) 4. T. T. Thu and R. Perera, "Intermediate Levels of Property Rights and the Emerging Housing Market in Ho Chi Minh City, Vietnam," Land Use Policy, Vol. 28, pp.124-138 (2011) 5. T. B. Nguyen, E. Krabben and D. A. Samsura, "Commercial Real Estate Investment in Ho Chi Minh City - A Level Playing Field for Foreign and Domestic Investors?," Habitat International Vol.44, pp.412-421 (2014) 280 Copyright 2018 SERSC
6. S. Kwak and J. Lee, "Overseas Expansion Strategy of Major Countries Firms toward Vietnam and the Implications for Korea," Korea Institute for Economic Policy (2016) 7. S. Jung, D. Huynh and P. G. Rowe, "The Pattern of Foreign Property Investment in Vietnam: The Apartment Market in Ho Chi Minh City," Habitat International, Vol. 39, pp.105-113 (2013) 8. T. T. Thu and R. Perera, "Consequences of the two-price System for Land in the Land and Housing Market in Ho Chi Minh City, Vietnam," Habitat International, Vol.35, pp.30-39 (2011) 9. KOTRA, "Vietnam Investment Strategy Guide" (2016) 10. CBRE, "Vietnam Market Outlook," Vietnam MarketView, http://www.cbrevietnam.com/useful-research (2016-2017). 11. Savills, "Viet Nam Market Brief," http://www.savills.com.vn/research/quarterly-marketreports.aspx, (2016-2017). Copyright 2018 SERSC 281