Limiting apartment ownership term deemed 'unsuitable'

By Vu Le, Duc Minh   June 4, 2022 | 04:00 am PT
Limiting apartment ownership term deemed 'unsuitable'
Apartment projects in HCMC's Thu Duc City. Photo by VnExpress/Quynh Tran
A Ministry of Construction proposal to reduce apartment ownership periods depending on their lifespan has been panned by critics.

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

Nguyen Manh Khoi, deputy head of the ministry’s Housing and Real Estate Market Management Agency, said it would help reduce the number of dilapidated apartments and bring prices down.

But insiders and analysts decried the proposal saying it would dissuade people from buying apartments and destabilize the market.

Le Hoang Chau, chairman of the HCMC Real Estate Association, said if an apartment’s lifespan runs out, it must be assessed for quality but owners should retain their titles as prescribed in the Law on Land and Law on Residential Housing.

Chau warned the ministry proposal could drag the apartment market down since a majority of people want to buy residential property with long-term ownership.

The standard lifespan is over 100 years for first grade buildings, 50-100 years for second grade, 20-50 years for third, and less than 20 years for fourth.

Su Ngoc Khuong, senior director at real estate consultancy Savills Vietnam, said it is unclear what would happen to the attached land once the ownership of an apartment expires since land ownership is indefinite.

From the social perspective, the new proposal, if approved, could help move people out of dilapidated apartments to ensure their safety, he said.

But apartments are a key solution to crowded cities like those in Vietnam, he pointed out.

Therefore, limiting ownership could move people from apartments to independent houses, driving their prices even higher and affecting liquidity, he said.

It is also unclear how apartment buyers would be compensated once the ownership term ends, he said.

Now apartment towers are renovated periodically and used beyond their nominal lifespan.

Khuong said in this case it is necessary to appraise and extend apartments’ lifespans to safeguard the interests of people living in them.

Le Net, an arbitrator at the Vietnam International Arbitration Center, said the proposal should only be implemented after wide consultations and if it receives support from a majority of the public.

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