What do experts recommend?

According to experts, converting condotels to apartments depends on local planning and is also a way to resolve difficulties for this segment. However, the adjustment needs to be public and transparent, and not all condotels can be converted into apartments, as this would set a bad precedent for disrupting the overall development plan of the locality.

Associate Professor Dr. Dinh Trong Thinh analyzed that converting condotel apartments into residential housing to salvage struggling projects during a market downturn, while a good solution that reassures investors, is only temporary and not every project will be fortunate enough to achieve this.

The core issue remains the need to finalize the legal framework for condotels so that this type of property can operate according to its true nature as a multi-functional real estate, leveraging the strengths of the sharing economy and improving the quality of tourist accommodation, instead of becoming merely a financial instrument.

The Da Nang Times Square condotel project has just been converted into an apartment building. (Photo: Chau Thu)

Mr. Thinh also stated that when converting condotel units into residential housing, the following issue needs to be addressed: Can the converted apartments continue to be rented out for business purposes like condotels? This is because most investors buy them for profit rather than for personal use. When there are regular residents, the management and operation methods will also need to change.

" If the conversion of residential areas into condotels and vice versa is permitted, there must be clear regulations. Even the handling of civil matters, related to contracts and commitments between the developer and the investor, needs to be specific and adjusted accordingly ," Mr. Thinh said.

The expert further commented that the nature of condotel is very good; it is both a trend and a real market demand, a "hybrid" with great potential, developing tourism and resort opportunities, and benefiting the economy, the locality, the developer, and investors.

Therefore, after being strictly legalized and having a solid foundation, in the future, the value of "two-in-one" real estate products like condotels will be entirely determined by the market. In addition, with their inherent advantages and superior profit potential, condotels will certainly be elevated to a new level, not just the current one.

Meanwhile, Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), stated that every area must develop according to the planning approved by the competent authority. Based on actual needs, localities can adjust that planning. When adjusting the land use purpose, it must be done by the competent authority following the correct procedures and in accordance with the law.

Regarding the conversion of condotels into apartments, Mr. Chau noted that allowing the conversion would increase pressure on urban infrastructure. The change in function from resort to residential would increase population density, leading to an overload of urban infrastructure, transportation, water supply and drainage, and accompanying social infrastructure.

Furthermore, condotels are products located within resort areas, meaning they are situated on land designated for business and service production, not residential use. Converting condotels into apartment units (residential housing) would significantly reduce the project's value, diminish the value of the area already planned for resort tourism, and consequently devalue neighboring resort areas.

“ Condotels must be managed in a coordinated manner in terms of services, security, and amenities, and these must also be invested in properly and consistently. If buyers are left to operate and manage them themselves, it could lead to chaos, ” Mr. Chau said.

According to Architect Do Viet Chien, Vice President of the Vietnam Real Estate Association, converting condotels into apartment buildings means shifting from a public purpose to a private purpose, private ownership, from merely leasing land to being granted permanent land ownership certificates. This will lead to the formation of a residential community. Once a community is established, accompanying social infrastructure is necessary, a factor that was initially limited in the condotel project's planning. Therefore, the first crucial step in this conversion is to address the issue of social infrastructure, resolving needs related to healthcare, culture, education, sports, etc.

Recently, the Vice Chairman of the Da Nang City People's Committee, Le Quang Nam, signed two decisions allowing Kim Long Nam Joint Stock Company to change the land use purpose for four condotel plots (CT1, CT2, CT3, CT7) at the Da Nang Times Square project.

According to the decision, the Da Nang City People's Committee allows the investor to change the land use purpose of nearly 4,000 m2 of commercial and service land in the four land plots to urban residential land for the construction of apartment buildings.

Previously, in 2019, Da Nang also converted thousands of condotel units at the Cocobay complex into apartments. Specifically, 1,016 condotel units out of a total of 1,856 under-construction units in the Co Co 1, 2, and 3 buildings were converted into apartments, and 544 condotel units out of a total of 1,657 units in the unfinished Cocobay Tower were also converted into apartments.

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Source: https://vtc.vn/chuyen-doi-condotel-thanh-nha-o-chuyen-gia-khuyen-cao-gi-ar784674.html