Though investment in condotels is expected to benefit the economy and the real estate sector, the condotel market is facing major challenges, heard attendees at a forum on the legal corridor for the condotel segment.
An aerial view of Cocobay Danang condotel complex in the central coastal city of Danang. The condotel market is facing major challenges
At the forum, held by the Vietnam Chamber of Commerce and Industry and Dien Dan Doanh Nghiep on December 14, participating experts stated that the benefits from investments in condotels included saving land and stimulating the development of the construction, service and tourism sectors. As for enterprises, this is a channel where capital can be mobilized legally and effectively.
However, the experts pointed out that many condotel developers have suffered losses due to high interest rates and there is a lack of laws governing the condotel business or regulations on operating condotels.
No regulations governing condotels have been added to the Land Law, the Law on Real Estate Business or the Civil Code. Condotels are not recognized as residential apartments, so buyers are not issued ownership certificates.
Former Deputy Minister of Natural Resources and Environment Dang Hung Vo noted that new types of tourism property projects are playing an important role in developing the tourism sector. However, the absence of laws is preventing these projects, mainly in the condotel segment, from growing, he remarked.
The difficulties facing the condotel market will immediately be addressed if long-term land use certificates are granted, the Vietnam News Agency reported, citing Vo.
A representative of a firm said that if the condotel segment is governed closely, negative effects will be minimized, large amounts of capital will be mobilized from residents and bank loans for the real estate sector will reduce.
Do Viet Chien, general secretary of the Vietnam Real Estate Association, suggested that the relevant ministries and departments take steps to remove bottlenecks facing the real estate market and especially the condotel market to allow it to gain ground.
Addressing the forum, Vuong Duy Dung, from the Department of Housing and Real Estate Market Management, under the Ministry of Construction, stated that in line with the prime minister’s directives, the ministry had researched the standards and regulations applicable to residential apartments, including condotels and officetels.
A set of these standards and regulations has been drawn up and submitted to the Ministry of Science and Technology for appraisal and evaluation prior to release, he said.
Statistics from the Ministry of Construction indicate that the country has 148 condotel projects being developed by 52 investors across many provinces and cities.
Some 27,000-29,000 condotels, mainly in Danang, Khanh Hoa, Phu Quoc, Ba Ria-Vung Tau and Binh Thuan, are estimated to have been put into service in the local market in the 2017-2019 period. SGT
After the short golden age, the condotel market is witnessing decline with the number of successful transactions just accounting for 25 percent compared to 70 percent in 2016-2017.
Cocobay's breaking its commitment of 12 percent profit has lowered the confidence of condotel investors.