Condotel is granted 'red book', will the price increase?

However, according to experts, in the short term, condotel prices cannot increase immediately for many reasons and specific regulations are still needed to grant certificates for this type.

Analyzing this issue with VTC News , Mr. Pham Duc Toan, General Director of EZ Real Estate Investment and Development Joint Stock Company (EZ Property) said that condotel prices are unlikely to increase immediately because the price of this segment in many tourist cities such as Da Nang, Nha Trang, Phu Quoc... is still very high because investors have committed profits to buyers, so if it increases further, the market will have difficulty absorbing it.

Besides, condotel still has the limitation that the "red book" still records the service apartment and has a limited ownership period. Meanwhile, the psychology of Vietnamese people is often interested in apartments that are owned permanently, leaving for future generations. Therefore, apartments with limited ownership are often priced lower than apartments with permanent ownership and are difficult to attract investors.

According to Mr. Toan, instead of offering high prices with attractive profit commitments, to attract customers to the condotel market, investors should offer low prices so that investors and developers can work together.

Sharing the same view, Mr. Nguyen Van Dinh - Vice President of the Vietnam Association of Real Estate Brokers (VARS) said that the issuance of Decree No. 10 of the Government on April 3 has great significance in removing legal bottlenecks for the resort real estate segment, specifically for buyers of condotels, officetels, and resort villas in the context that this segment has recently been "sunk into a long sleep" due to legal problems.

However, condotel prices cannot fluctuate in the short term because there needs to be very detailed and specific instructions to easily handle violations during the implementation process.

“The condotel market is unlikely to “reverse” and will continue to be quiet with average liquidity. Market developments depend on legal issues, cash flow and tourism growth, ” said Mr. Dinh.

The leader of a real estate company in Nha Trang also predicted that Decree No. 10 cannot have an immediate impact on the condotel market in the short term, because real estate in general still faces many difficulties. Therefore, the price of this segment cannot increase immediately.

According to him, for new customers, whether condotel has a "red book" or not, it is still very complicated, brokers still find it difficult to sell condotel because the investment decision must be based on the capacity of the investor and operating unit.

In addition, this segment has grown thanks to attractive profit commitments. However, these commitments are not currently appealing to many people, because they have lost confidence over time. If the profit commitment is low, they will consider switching to savings.

However, experts assert that condotels being granted "red books" will remove long-standing obstacles, helping the tourism real estate market gradually develop again. This decree has been awaited by the whole market for a long time and when it comes into effect, it will create a way out for many unfinished projects.

For a long time, the legal issues for condotels have been unclear, and some localities have tried to “break the rules” to remove this bottleneck but had to revoke it immediately afterwards. Therefore, the new Government Decree has created a legal corridor for buyers to feel secure about their ownership and property value, creating a new breeze in the tourism real estate market.

Deputy Prime Minister Tran Hong Ha has just signed and issued Decree No. 10/ND-CP amending and supplementing a number of articles of the decrees guiding the implementation of the Land Law, effective from May 20.
The Decree allows the granting of certificates of land use rights, house ownership rights and other assets attached to land to buyers of products in projects other than housing projects, including tourist accommodation facilities on commercial land.
To be granted a certificate, these projects must meet the conditions prescribed by law on land, construction, and real estate business.
Land use term as prescribed in Clause 3, Article 126 and Clause 1, Article 128 of the Land Law. The owner of the construction work is responsible before the law for meeting all conditions.

Ngoc Vy

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