Limited ownership term apartments cost less, but attract few buyers

By Vu Le September 24, 2022 | 06:00 pm PT

Apartment buildings in Ho Chi Minh City. Photo by VnExpress/Quynh Tran

An apartment with an ownership duration of around 50 years costs 20% less than one with permanent ownership, but has not attracted the majority of homebuyers, an association says.

The limited ownership duration only meets the needs of a small percentage of customers, including young people, the Ho Chi Minh City Real Estate Association (HoREA) said in a comment on the Ministry of Construction’s proposal to limit apartment ownership duration.

In proposing amendments to the Housing Law, the ministry said it wants to limit ownership to 50-70 years in line with apartments’ lifespans.

There should be no limit on ownership as Vietnamese people prefer to own a home permanently, the association said.

Apartments with limited ownership duration began to surface in HCMC 14 years ago.

The Manor II in Binh Thanh District is one of the early projects that limit ownership of an apartment to 50 years. The Twin Tower project in Binh Tan District in 2011-2013 has apartments with an ownership duration of 49 years.

From 2016, officetels (residential and commercial purposes combined) with limited ownership duration started to boom in Districts 4 and 7. They are priced 20-25% lower than similar units on the market.

Le Hoang Chau, HoREA chairman, said only a few projects in the city offer limited ownership duration apartments.

As a fast-growing economy, Vietnam will see prices of property, especially land, surging in upcoming years, and most buyers want to see their apartment value increase overtime with the prices of land on which they are built, he added.