Local demand for real estate products with long-term ownership exceeds supply as most of Vietnamese people prefer this kind of deal, experts said during a recent conference.
During the conference titled ‘Real estateownership trend: International experience and Vietnamese practice’ held by theVietnam Real Estate Association in Ho Chi Minh City, Duong Thuy Dung, CBREVietnam’s Senior Director, said besides land with long-term ownership,apartments, villas and shophouses are preferred by domestic home buyers andinvestors in recent years.
Apartments, which have long-term ownership, havebeen offered for sale most due to high demand as local real estate buyers andinvestors prefer real estate products with long-term ownership, Dung said.
The total numbers of the apartments offered forsale in the country’s two largest markets of HCM City and Hanoi rose from15,000 in 2008 to 63,000 last year while the number of apartments sold reached55,000 from 8,000 in 2008.
Until now, home buyers and investors stillprefer long-term ownership. Meanwhile, the number of the apartments in HCM Cityand Hanoi is only roughly 260,000, compared with the population of more than 23million people.
"The number of the apartments is too modestcompared to the demand while the supply is also too low," Dung said,adding there is huge room for the development of the realty segment.
According to Dung, in the first six months of2019, the number of real estate products with long-term ownership offered forsale dropped significantly compared to the same period last year givinginvestors fewer choices.
Due to the reduction, substitute products, suchas condotel, officetel and resort villas, that have an ownership time limit,have begun to receive attention from real estate investors. Buyers of thesubstitute products are mainly for investment purpose. In Nha Trang and DaNang, for example, there are some 16,000 substitute products.
According to Dung, more than 70 out of 220countries in the world regulate apartments for sale having an ownership timelimit. The limit in Singapore is 99 years and the Philippines, 50 years.
In Vietnam, many projects have a long-termownership. However, some others, even in some key projects, the ownership timelimit is 50 years.
Forresort real estate, the ownership time limit in Vietnam is 50-70 years,compared with 30 years in Thailand.
To encourage buyers of the substitute products with an ownership time limit,Nguyen Thi Thanh Huong, Dai Phuc Land’s general director, said developersshould pledge profit return rates to make it attractive to buyers.
However, as some developers failed to meet the commitments in profit rates lastyear, investors are now also interested in the capacity of investors andoperators, said Nguyen Hoang, Research & Development Director of DKRAVietnam Company.-VNS/VNA