Residential buildings in Ha Noi's Pham Hung Street. — VNA/VNS Photo Thai Ha

Taking effect on April 8, the new circular (Circular 03/2014/TT-BXD) issued by the Ministry of Construction says that the value of an apartment would henceforth be calculated based on the net useable area.

Currently, the area of an apartment is calculated from the centre of its walls, while the new regulation would require that is measured from the walls' edges.

Developers have reacted to the circular by saying they will increase their per sq.m prices by three to 10 per cent, but hastened to add this will have minimal or no effect on the total price.

The investor for the Thang Long Number One Residential Building Project has said their prices will increase by three to five per cent starting this month. Currently, the average price for an apartment in this project is VND30 million (US$1,400) per sq.m.

Meanwhile, the Hoa Binh Green City Project on Minh Khai Street is considering increasing its per sq.m prices by as much as 10 per cent. In its recent opening sale, the Golden West Project increased its per sq.m price by five per cent.

Le Kim Khanh, Director of the Infoland Real Estate Trading Floor, said the total value of the project would remain the same despite this increase.

"The cost of building an apartment project includes spending on the frame, the falls, the elevator, the stairs, common and private spaces, so while the per sq.m price will increase when the new method is applied, the total price of the project would remain the same," she said.

It was not clear immediately by how much the area of an apartment would reduce under the new calculation method and whether buyers would end up paying more or less at the new, higher per sq.m prices.

The new Circular is said to be an attempt to address problems with the old one, Circular 16, that had led to some conflict between buyers and investors on what the former were being charged for when they purchased an apartment. — VNS