VietNamNet Bridge - The anticipated oversupply and unclear legal status have prompted many investors to give up investments in condotel projects.


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There is no legal framework for condotels



Nguyen Xuan Hai, an investor in Hanoi, told reporters that he is selling nearly 10 condotels at projects in Da Nang, Nha Trang and Phu Quoc.

In late 2016, he bought over 10 condotels at five large projects. Two years have elapsed, but the projects are not operational and the expected profits are not as high as he had thought. 

“I decided to sell two-thirds of my investments to get capital back for other investment deals,” he said.

The prices of condotels have not escalated as expected and it is difficult to transfer condotels because of the unclear legal status. As the profit cannot cover bank loan interest rates, investors have had to sell condotels at a loss.

Ads for condotel sales have appeared everywhere. A real estate broker said he wanted to sell a 45 square meter condotel in Phu Quoc at VND2.5 billion (the buy price shown in the contract is VND3.3 billion), but complained that he has not found any buyer over the last three months.

A series of condotels on Le Thanh Ton street in Nha Trang City are on sale at prices lower by VND50-100 million than the original prices. However, very few successful transactions have been reported.

Even the Da Nang condotel project, which was very ‘hot’ when it was opened for sale by primary investors, now is not selling.

Pham Ngoc Vu, director of Dat Pho Real Estate Trading Floor, said since the fourth quarter of 2017, condotel owners have found it difficult to transfer condotels because of weak liquidity.

Vu said there are many more sales than purchase offers. In the past, condotels sold like hot cakes as primary investors committed high profits of 10-15 percent per annum. 

But buyers have realized that it is difficult to lease condotels, while business authorization cannot bring satisfactory profits.

Meanwhile, the prices of condotels have not escalated as expected and it is difficult to transfer condotels because of the unclear legal status. As the profit cannot cover bank loan interest rates, investors have had to sell condotels at a loss.

“Buyers all want to affirm their ownership over condotels, so they always ask the sellers to commit to provide an ownership certificate. But no seller dares to make such commitment,” he explained.

The latest report by DKRA, a market analysis firm, also said the resort real estate market declined sharply in the second quarter of the year because of the sharp fall in demand.

About 2,000 condotels were launched into the market, but sales were just equal to one-third of that in the previous quarter. In Da Nang, only 9 percent of products were sold, which means an inventory level of 91 percent. In Binh Dinh and Khanh Hoa, sales were between 22-26 percent. 


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