Friday, September 22 2017

VietNamNews

Legality of condotels must be clarified

Update: January, 26/2017 - 09:00
Condotel, a condominium operated as a hotel, is arising as an attrative investment channel in Việt Nam’s realty market. - Photo duancondotel.net
Viet Nam News

HÀ NỘI — Experts said the legality of coastal condotels should be clarified since the product had recently emerged an investment trend in Việt Nam’s realty market.

According to Nguyễn Quốc Khánh, president of G5 Property Trading Floor Alliance, condotel, a condominium operated as a hotel, is a new property product in Việt Nam but has already grabbed significant market attention.

Khánh cited statistics showing that in 2016 alone, there were more than 12,000 condotels put up for sale on the market.

However, the lack of regulations was hindering the development of condotels as well as investment in this segment, Khánh said.

Khánh said investors remained unclear about ownership when investing in condotels.

Developers were offering different durations for condotel ownership, which could be 50 years, 70 years or long term, depending on the project, and this was confusing investors, Khánh said.

He said the granting of condotel ownership certificate also faced obstacles as details had not been clearly laid out.

“Condotels are being developed mainly in tourist-attraction localities. The project can be developed on commercial service land which is for lease and not allowed to be sold like residential land. As a result, it is difficult to ask for an ownership certificate,” Khánh said.

In addition, there were no detailed regulations on the purpose of condotels as well as the fees to be collected.

Investors were also worried about the feasibility of returns that developers guaranteed and transparency on returning guaranteed profits, Khánh said. Popular rates of return that developers guaranteed for condotel investment were between eight and 14 per cent for a period of 5-10 years.

To promote condotel development, policies on ownership should be clarified and condotels should be added as a legal property product, Khánh said, adding that annual audit of condotel projects must be made mandatory to protect investors’ rights.

According to Đoàn Văn Bình, deputy president of Việt Nam Real Estate Association, regulations on granting condotel ownership certificate, ownership duration and ownership transfer needed to be clarified to boost liquidity.

Bình said technical standards of coastal condotels must be issued early for appropriate operation.

According to Nguyễn Văn Nam, deputy director of Đà Nẵng Construction Department, the development of condotels must be put under tight management to ensure compliance with urban planning and in accordance with technical infrastructure and tourism industry development. Responsibilities of developers, owners and ownership must also be clarified, Nam said.

Đỗ Thu Hằng, deputy director of property services firm Savills Hà Nội, said condotels made an appearance in Việt Nam’s realty market some five years ago and became an especially hot trend since last year. Hằng forecast that liquidity of condotels would see improvement this year and remain an attractive investment channel. — VNS

 

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