Why do real estate developers want to legalize condotels?
Why do real estate developers want to legalize condotels?
Real estate experts believe that selling condotels can bring huge profits to investors and savings in fees that apartment developers usually pay.
The first condotels appeared in Vietnam several years ago and have been developing very rapidly since then. According to the Ministry of Construction (MOC), there are 148 ongoing condotel projects developed by 52 investors. It is expected that 27,000-29,000 condotels will be launched into the market in 2017-2019. Despite the existence of numerous products, condotels have not been recognized by the law. Condotels remain out of the management of state agencies.
However, in the last six months, ministries and branches have urged to legalize condotels. At the same time, condotel developers have been repeatedly organizing workshops to lobby policymakers for recognizing condotels as a new type of housing.
The investors have proposed creating standards for condotels and grant land use right certificates for an indefinite time.
Lawyer Bui Sinh Quyen from the Hanoi Bar Association, said that condotel development is just a new ‘phenomenon’ and ‘there is no need to run after every phenomenon’, because this will only benefit investors.
According to Quyen, resort tourism projects must be seen as production and business projects, not as housing. The decisions on allocating and leasing land for project implementation show clearly the purposes and land use duration.
The 2013 Land Law stipulates that the duration can be no more than 70 years in difficult areas and 50 years in other areas.
Le Hoang Chau, chair of the HCM City Real Estate Association (HoREA), said investors repeatedly urged to recognize condotels because local authorities called for investments and created favorable conditions in land access and administrative procedures to attract investments in condotel projects.
Condotels are sold by primary investors at VND25-55 million per square meter, or VND1-3 billion for each condotel. The prices, according to Chau, are equal to prices of mid- and high-end apartments in HCM City.
There are still no required standards for design, functions and fire prevention and fighting set specifically for condotels. An architect said that condotels were like hotel rooms, but with a kitchen and more bedrooms.
The condotel market is forecast to remain attractive to investors in 2018, with increasing amounts of capital poured into the segment.
