Issuance of ownership certificates for condotels will solve difficulties in the domestic hospitality market (Photo: vietnammoi.vn) Hanoi (VNS/VNA) - Experts believe the State'sissuance of ownership certificates for non-residential real estate projectswill solve existing difficulties in Vietnam’s real estate market.
The Ministry of Natural Resources and Environment last weekissued new guidelines about the land use regime and the certification ofnon-residential construction works, such as condotels.
“These new guidelines bring positive signals to Vietnam’sreal estate market at the start of this year, especially for hospitalitydevelopers and investors,” Su Ngoc Khuong, Senior Director of Investment,Savills Vietnam, told Vietnam News.
“If the guideline is officially implemented, it will providegreat support and leverage for the hospitality sector.”
Hospitality investors have two main sources of income:selling second-home villas and condotels, and entertainment activities andleisure services in their projects. Currently, as the revenue of hospitalityservices has dropped, investors can take advantage of the fact that the buyeris granted the property ownership certificate, to stimulate the needs ofbuyers, thereby preserving the initial investment, according to Khuong.
For individual investors, this is also considered a positivemove, as the real estate market in big cities like Hanoi and HCM City is facingnumerous issues related to legal problems or limited supply. They will also bemore assured in proactively increasing profits by owning a new type of propertysuch as a second home, condotel or office-tel.
Nguyen Huu Quang, deputy general director of the Netland RealEstate Joint Stock Company, said granting ownership certificates for condotelswas a breakthrough in completing the legal system for condotel products. Itwould protect the rights of buyers.
The buyers could mortgage their condotel products at banks orcredit institutions to get loans. For businesses, this important document wouldremove difficulties in trading those products, Quang said.
Nguyen Thanh Huong, general director of Dai Phuc Land, toldbizlive.vn that the condotel market had developed strongly in recent yearsalong with the high growth in travel services and resorts from north to south.However, the existing legal documents had not yet been completed to ensureinterests of investors and buyers in the condotel market.
Condotel ownership was one of the problems that had directlyaffected buyers’ interest in the long term. Therefore, this regulation hadremoved "bottlenecks" in the legal system to promote development ofthis potential condotel market, she said.
Van Dung Chinh, general secretary of the Khanh Hoa RealEstate Association, said the ownership certificates for condotel would have alegal value in trading activities on the secondary market.
It would make the market more transparent and sustainableafter a few years of development. In the future, reputable investors withfinancial ability would have more chances to develop.
However, Chinh said, the issuance of ownership certificatesfor condotels could not boost development of the condotel market to reach stronggrowth like 2-3 years ago.
In the short term, this market still faced difficulties, hesaid.
Meanwhile, lawyer Mai Thi Thao, head of the EconomicDepartment at the TAT Law Firm, is afraid that granting an ownershipcertificate for each condotel apartment will give a right to the buyer.Therefore, they could change the initial use purpose of the condotel to servetourists or other purposes that are different from the original purpose.
Expert Dang Hung Vo said, in the long term, Vietnam wouldneed to add specific regulations relating to multi-functional property productsto the Land Law, the Housing Law and the Real Estate Business Law.
Huong Tran Kieu Dung, general director of FLC – a group withmany condotel projects in Thanh Hoa, Binh Dinh and Quang Ninh – had alsoproposed the Government develop regulations allowing foreigners to buy condotelproducts, reported zing.vn.
In the future, the State also would need to grant ownershipcertificates for officetels, said Nguyen Le My Hung, head of the Project LegalDepartment of Novaland Group – a group developing major resort projects in Ba Ria- Vung Tau, Binh Thuan and Khanh Hoa.
Hung said many large businesses in Hanoi and HCM City hadinvested to develop officetel projects, but buyers of those products were notgranted the ownership certificates to ensure their benefits.
He said granting ownership certificates for condotels wouldincrease the potential of the same certificates for officetels (office andhotel). This is also a type of apartment with residential and commercialpurposes.
In Vietnam, condotels have developed since 2015, and thissegment saw big growth in 2017 and 2018, mainly in coastal provinces such asQuang Ninh, Quy Nhon, Da Nang, Nha Trang, Phan Thiet, Vung Tau and Phu Quoc.However, this market has diminished from the end of 2018.
According to the Ministry of Construction, the domestictourism real estate market, including condotel and tourist villas, saw about6,280 transactions in 2019, a decrease of 20 percent year on year.
The reduction was due to a lack of specific regulations forthis property product line. In addition, high prices and low liquidity deterredinvestors.
At present, the condotel market has faced more difficultiesafter Cocobay Da Nang’s announcement of not being able to pay interest tobuyers, as well as the coronavirus epidemic./.
The Ministry of Natural Resources and Environment last weekissued new guidelines about the land use regime and the certification ofnon-residential construction works, such as condotels.
“These new guidelines bring positive signals to Vietnam’sreal estate market at the start of this year, especially for hospitalitydevelopers and investors,” Su Ngoc Khuong, Senior Director of Investment,Savills Vietnam, told Vietnam News.
“If the guideline is officially implemented, it will providegreat support and leverage for the hospitality sector.”
Hospitality investors have two main sources of income:selling second-home villas and condotels, and entertainment activities andleisure services in their projects. Currently, as the revenue of hospitalityservices has dropped, investors can take advantage of the fact that the buyeris granted the property ownership certificate, to stimulate the needs ofbuyers, thereby preserving the initial investment, according to Khuong.
For individual investors, this is also considered a positivemove, as the real estate market in big cities like Hanoi and HCM City is facingnumerous issues related to legal problems or limited supply. They will also bemore assured in proactively increasing profits by owning a new type of propertysuch as a second home, condotel or office-tel.
Nguyen Huu Quang, deputy general director of the Netland RealEstate Joint Stock Company, said granting ownership certificates for condotelswas a breakthrough in completing the legal system for condotel products. Itwould protect the rights of buyers.
The buyers could mortgage their condotel products at banks orcredit institutions to get loans. For businesses, this important document wouldremove difficulties in trading those products, Quang said.
Nguyen Thanh Huong, general director of Dai Phuc Land, toldbizlive.vn that the condotel market had developed strongly in recent yearsalong with the high growth in travel services and resorts from north to south.However, the existing legal documents had not yet been completed to ensureinterests of investors and buyers in the condotel market.
Condotel ownership was one of the problems that had directlyaffected buyers’ interest in the long term. Therefore, this regulation hadremoved "bottlenecks" in the legal system to promote development ofthis potential condotel market, she said.
Van Dung Chinh, general secretary of the Khanh Hoa RealEstate Association, said the ownership certificates for condotel would have alegal value in trading activities on the secondary market.
It would make the market more transparent and sustainableafter a few years of development. In the future, reputable investors withfinancial ability would have more chances to develop.
However, Chinh said, the issuance of ownership certificatesfor condotels could not boost development of the condotel market to reach stronggrowth like 2-3 years ago.
In the short term, this market still faced difficulties, hesaid.
Meanwhile, lawyer Mai Thi Thao, head of the EconomicDepartment at the TAT Law Firm, is afraid that granting an ownershipcertificate for each condotel apartment will give a right to the buyer.Therefore, they could change the initial use purpose of the condotel to servetourists or other purposes that are different from the original purpose.
Expert Dang Hung Vo said, in the long term, Vietnam wouldneed to add specific regulations relating to multi-functional property productsto the Land Law, the Housing Law and the Real Estate Business Law.
Huong Tran Kieu Dung, general director of FLC – a group withmany condotel projects in Thanh Hoa, Binh Dinh and Quang Ninh – had alsoproposed the Government develop regulations allowing foreigners to buy condotelproducts, reported zing.vn.
In the future, the State also would need to grant ownershipcertificates for officetels, said Nguyen Le My Hung, head of the Project LegalDepartment of Novaland Group – a group developing major resort projects in Ba Ria- Vung Tau, Binh Thuan and Khanh Hoa.
Hung said many large businesses in Hanoi and HCM City hadinvested to develop officetel projects, but buyers of those products were notgranted the ownership certificates to ensure their benefits.
He said granting ownership certificates for condotels wouldincrease the potential of the same certificates for officetels (office andhotel). This is also a type of apartment with residential and commercialpurposes.
In Vietnam, condotels have developed since 2015, and thissegment saw big growth in 2017 and 2018, mainly in coastal provinces such asQuang Ninh, Quy Nhon, Da Nang, Nha Trang, Phan Thiet, Vung Tau and Phu Quoc.However, this market has diminished from the end of 2018.
According to the Ministry of Construction, the domestictourism real estate market, including condotel and tourist villas, saw about6,280 transactions in 2019, a decrease of 20 percent year on year.
The reduction was due to a lack of specific regulations forthis property product line. In addition, high prices and low liquidity deterredinvestors.
At present, the condotel market has faced more difficultiesafter Cocobay Da Nang’s announcement of not being able to pay interest tobuyers, as well as the coronavirus epidemic./.
VNA
