Vietnamese uninterested in 49-year-ownership houses
Vietnamese uninterested in 49-year-ownership houses
Vietnamese, who always want their immovable properties to be their permanent assets, would not be interested in 49-year-ownership houses.
The HCM City Real Estate Association has proposed to allow people to own properties for a certain period, believing that the new homeownership option would help ease the oversupply and warm up the real estate market.
In fact, a lot of real estate firms had been developing the projects of this type before the association made such a proposal.
In the thoughts of many Vietnamese, owning houses for a definite time is a type of leasing houses for a long term with one payment.
Some investors, who cannot sell out their apartments in the context of the low demand, have put the apartment for lease to make money instead of leaving the apartments idle.
The investors target young families which have high monthly incomes, but still don’t have the savings big enough to buy houses. The developer of a project in Binh Tan district in HCM City, for example, now leases apartments for 49 years for VND350 million.
The director of a big real estate firm said at an exhibition in late 2010 in HCM City then revealed that he would offer different options to customers to boost sales.
He said he would offer the apartments at a project on Cong Hoa Road in Tan Binh district in HCM City at a surprisingly low price of VND15 million per square meter, while the average price of the apartments in the area was VND30 million.
However, in order to enjoy the low prices, buyers would only have the right to own the apartments within 50 years.
Analysts have warned that though the new type of house ownership would attract some buyers, it would far below from creating a new liquidity channel for the market. Vietnamese always want their properties belong to them forever, and they would not accept to buy the houses which would leave them after 50 years.
Le Huu Nghia, Director of Le Thanh Company, also admitted that he still needs to listen out for the market response before deciding whether to develop similar projects.
“We have launched some products of this type, but these are considered just as the “reagent.” We don’t intend to market the products en mass at the immediate time,” he said.
Analysts have noted that Vietnamese need more time to learn about the fixed-term house ownership, and they would only be interested in the houses once the psychological barriers are removed.
The only advantage of the fixed-term house ownership is that people can possess the properties at low prices and for a long time of tens of years.
However, the properties can only serve as the accommodations, while they cannot bring profits. Those, who own houses permanently, can expect profits, once they sell the houses later when the real estate prices increase. Meanwhile, as for the fixed term ownership house, the properties’ value would be decreasing day by day.
Lawyer Truong Thi Hoa, Deputy Chair of the HCM City Arbitration Center, has raised the question about the legitimacy after 50 years. How will be the assets’ fate after the leasing term finishes? And how about the land use right of the projects?
vietnamnet
