Time - limited Real Estate - New trend in the market

Owning a lot of advantages in terms of liquidity, profitability for rent, occupancy rate,... real estate is assessed to be a new trend, especially in the context of long-term property does not meet the demand for accommodation and investment.


This is a common view that has received the consent of the majority of speakers and experts at the seminar "Trends in property ownership: International experience and practice in Vietnam" has just taken place in Ho Chi Minh City.


New trend


Talking about the land use term in Vietnam, Prof. Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, said that Vietnam has recognized residential land to be used for a long time, the main reason is in accordance with the traditional thinking of Vietnamese people.


However, besides long-term real estate, the term land use regime has the advantage of making land users more responsible, always wanting to use it fully within the time limit they have paid for, avoid land speculation and store financial resources into land.


Prof. Dang Hung Vo, former Deputy Minister of Natural Resources and Environment


According to Ms. Duong Thuy Dung, Senior Director of CBRE Vietnam, the market exists both long-term and long-term ownership. For traditional apartments, Vietnam, Thailand and Malaysia all allow long-term ownership; Singapore has long term ownership or 99 years; Philippines, the government only for all projects owned 50 years.


For resort real estate, Vietnam currently owns 50 - 70 years. In Thailand, the resort apartment is only owned for 30 years. Despite owning 30 years, the number of resort apartments in Phuket is 3 times as much as resort apartments in Da Nang.


There are more than 70 countries in 220 countries in the world with the type of apartments for sale for a limited time. It is worth noting that there is no permanent type of ownership, so there are markets that are either permanently or permanently owned.


Ms. Duong Thuy Dung, Senior Director of CBRE Vietnam


The investor has accepted ownership of 50 years


From a market perspective, the senior director of CBRE Vietnam stated that, in the context of the supply of long-term real estate is increasingly limited, the replacement products which are owned products with limited time are becoming the trend and are be well received the attention and acceptance of the buyer.


“In the past 4 years, from 2015 - 2019, in both Da Nang, Nha Trang, and Phu Quoc, the condotel market has grown 100%, the following year has grown three times as much as the previous year. The location is good, the amount of booking is higher than the number offered”, Ms. Dung said.
"For about a year, investors have accepted ownership of 50 years" CBRE leaders concluded and emphasized, long-term ownership property is not the only option, especially for investing houses.


Costs are high but profits can be high


Commenting on the commitment to profit, Mr. Nguyen Hoang, Director of R&D of DKRA Vietnam said, recently, there has been an adjustment on this issue in the direction of reducing the commitment to profitability, and more attention to the project management unit or investor capacity.


Mr. Nguyen Hoang, Director of R&D of DKRA Vietnam


Regarding investment costs, Ms. Dung commented that most of the real estate with a term comes from the resort segment, and this segment only has high-end luxury or high level of intermediate, almost no ordinary people. This makes the capital investment cost high.


“However, the occupancy of these resort products is very good. Products such as condotels are rented by the day, and the prices in the peak seasons, weekends... are adjusted very flexibly. If there is an additional professional management unit, the rental price may be 10-15% higher and therefore, investors are willing to accept higher costs because profits are often better than renting for traditional apartments", Ms. Dung said.


According to Nguyen Huu Quang, Deputy General Director of Netland, this unit still has orders from investors from Japan. For example, although the product has a term in the Philippines after 50 years will not be extended but up to 99% of condotel projects here are sold to Japanese people. Therefore, Netland's leaders said that if the two issues of price and profit of investors are solved, real estate with time limit will have a great attraction to investors.


Real estate needs legal term


Commenting on the condotel market, there is a silence due to the inconsistent legal, Mr. Dang Hung Vo said that regardless of the regulations, the final goal was to be clear to protect the rights of the people.


According to Ms. Duong Thuy Dung, the potential of condotel is currently very large. “Therefore, the authorities need to clarify from the legal framework: taxes, prices... to encourage ownership of apartments for a limited time. Especially, if the price of investors has a clear frame, there is a gap in the same location, the same product for a definite and indefinite term, it will be more attractive to investors”, Ms. Dung said.


According Nhu Loan