Title deed grants to stir up condotel market

By Vu Le   May 23, 2023 | 03:14 pm PT
Title deed grants to stir up condotel market
Condotels in Da Nang City. Photo by VnExpress/Kim Lien
The granting of title deeds on condotels is expected to resolve challenges that have been around for years, but it might take a while for the market to unfreeze amid macro difficulties.

Condotels, a type of condominium that operates like a hotel in which units are owned by individuals that have entrusted an operator to rent them out, were officially approved by the Ministry of Natural Resources and Environment on May 20 to be granted title deeds just like any other property.

The approval resolves many issues that have long been plaguing the condotel market, said Vo Hong Thang, deputy director of property services provider DKRA Group.

"Condotel owners could not mortgage their units to banks before, but now they can, and this will help increase the liquidity of the property," he said.

Owners will be relieved to know that their properties are legally recognized and any problem in ownership between them and the developer can be resolved within the legal framework, he added.

"This is a boost for developers to sell more products and for buyers to have confidence in the future of their investment."

By the end of last year there were around 83,000 condotel units in Vietnam and their owners had been waiting years for title deeds, said Le Hoang Chau, chairman of Ho Chi Minh City Real Estate Association.

The latest policy therefore has helped thousands of owners and increase the transparency of the property market, he added.

But analysts say that it might require more solutions for the condotel market to boom, given that there are still obstacles in the operation and development of this type of property.

Thang said that there is a lack of an efficient unit management mechanism in the market, and it is difficult for a strong recovery to happen unless the macro economy improves.

Last month, only 32 condotel units were sold nationwide, slightly higher than March. None were sold in the first two months, according to DKRA data. "The title deeds are necessary but not enough to thaw a frozen property market," Chau said.

Chau added that apart from condotels, other type of non-traditional property such as beach shophouses, serviced apartments and officetels should be granted title deeds also.

A report by property consultancy Colliers Vietnam said that said that the country remains among the lowest in Southeast Asia in terms of foreign tourists.

In the first three months, 2.7 million foreign tourists arrived in Vietnam, a third of the national target for the year. In the same period, Thailand welcomed 6.15 million tourists.

David Jackson, CEO of Colliers Vietnam, said that the recovery of Vietnam's resort tourism industry is slower than other Asian markets and some concerns remain due to economic instability. He added that there is still a freeze in the resort property market.

But there are glimmers of hope for recovery because Vietnam's resort real estate market still has a lot of potential in the medium and long term, he said, adding that the positive sign is that the government is interested in removing the legal challenges for this type of property.

A proposed extension to prolong the duration of e-visas granted to foreigners entering Vietnam from 30 days to a maximum of three months is also expected to boost up demand.

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