Tenants disappointed as 'premium' apartments fail to deliver

Her family bought the so-called high-end apartment with the 200-square-meter unit costing over VND8 billion (US$316,520).

"We decided to buy an apartment here because the ad promised river and lake views, an infinity pool, a premium playground for children, and, especially, a Babylon hanging garden," she says.

But the "infinity pool" turned out to be a regular pool for which residents had to buy tickets, the "fully-equipped commercial center" was a small supermarket, the "five-star children’s playground" to serve the 3,000 residents was only 30 square meters, and the "Babylon hanging garden" she was keen on was merely a scattering of potted plants.

The litany of woes did not end there, as the developer delayed establishing a management board. Last year residents were informed that a road, the soccer pitch and tennis court inside were on borrowed land and could be reclaimed at any time.

A metal fence was erected on the complex’s main road, blocking the most accessible fire escape route.

"This happened right after the fire in Khuong Ha [Ward, Thanh Xuan District], and so we are extremely anxious," Hoa says.

A metal fence installed across the main road in Hoa’s apartment complex in September 2023. Photo courtesy of Hoa

While "high-end apartment" ads are a dime a dozen in the market, a 2023 report by the Vietnam Law Committee revealed that only seven apartment projects in the entire country met the standards stipulated in the Housing Law. Most others simply make claims of being high-end and often have fancy-sounding names.

According to Ministry of Construction’s regulation, a grade A (highest classification) apartment complex must meet at least 18 out of 20 criteria across four categories: planning-architecture, technical systems, social infrastructure-services, and management-quality.

The key criteria include a building density of less than 45%; each apartment having at least one sheltered parking space; hospitals, clinics, preschools, and primary schools within 500 meters from the complex; and professional management.

The grading system ranks buildings through grade C.

"Advertising an apartment complex as ‘premium’ or ‘luxury’ is a marketing tactic, and many so-called luxury apartments are sold at premium prices without meeting the defined quality standards," Le Hoang Chau, president of the Ho Chi Minh City Real Estate Association, says.

Huong Tra, 43, lives with her family in a similar complex in the capital’s Ha Dong District, and has experienced similar issues.

In 2014 she and her husband paid over VND3 billion for a 90-square-meter apartment in the complex, which was then-advertised as "five-star." Initially things seemed fine, but as the resident count grew, so did the problems. The 35-story building, with nearly 500 apartments, has only four small elevators that frequently break down. During rush hour residents must queue for a long time to get into one. On some days it takes Tra 15 minutes just to get up or down.

"I often face ‘defeat’ in the parking lot after surviving the elevator ordeal," she says, referring to the frequent lack of parking spots and congestion that blocks cars from exiting.

The hallways are only cleaned every other day, surveillance cameras don’t work, and at one point the tap water was severely contaminated.

Tra is sure the monthly service fee of VND11,000 per square meter does not match the quality of the property.

An apartment project near the West Lake in Hanoi. Photo by VnExpress/Anh Tu

According to the Vietnam Association of Real Estate Brokers, 70% of housing supply in the first nine months of 2024 was in the apartment segment, with high-end and luxury segments dominating.

Data from OneHousing shows that the average price of new apartments was VND80.5 million per square meter at the end of the third quarter, a 7.6% increase from the previous quarter.

Nguyen Danh Hue of the Hanoi Bar Association says that disputes between residents and apartment developers are common, especially in high-end complexes where promised infrastructure, amenities and services often do not meet expectations. Many developers advertise "impressive" amenities, but only provide basic facilities at handover, delaying or even not fulfilling their promises.

He cites the example of a project in Nam Tu Liem District where a park was advertised but remains unbuilt years after residents moved in.

Another high-end project in Cau Giay District has a shared hallway only 1.47 meters wide, posing daily difficulties and problems with moving furniture and fire safety.

Dr. Nguyen Huu Cuong, president of the Hanoi Real Estate Association, who has done a doctoral study on luxury apartments, says not every luxury project is worth the price. Some marketed as "places to long for and return to" have even left their residents with flooding, smoke and noise pollution from karaoke, he points out.

But he admits that such issues have decreased in recent years as stricter regulations and more informed consumers have gradually improved the market.

He suggests that those aiming to buy a property should research future development plans in their desired areas, verify the project’s legal status and understand the developer’s after-sales policies.

"Buying through reputable platforms can help vet project information, as they act as ‘filters’ to protect customers’ rights."

After years of dealing with crowded roads and elevators, last year, Tra and her family decided to relocate to another high-end apartment, which is closer to their children’s school and workplaces and costing VND9 billion.

Hoa and other residents in her complex have filed a lawsuit against the developer over the blocked access road, which poses fire safety risks. After a few months the fence was removed.

Hoa admits she did not verify the project’s legal aspects when buying the apartment. "At the time the developer’s name was unfamiliar, and it was their first project," she says. "Unfortunately, I overlooked this factor."