From a hot real estate trend for over three years, 2019 marked fall from favor for condotels – controversies and protests dogged the sector.
Though the condotel market is facing major challenges, investment in condotels remains appealing and is expected to benefit the real estate sector, as long as a clear legal corridor is established to protect investors.
With many investors getting duped by developers, the HCMC Real Estate Association (HoREA) has proposed amending unreasonable regulations affecting the condotel segment which causes huge losses to secondary investors.
Buyers of condotel units are at stake since they have made their investment decisions based on what brokers have said and on their trust in project developers without obtaining sufficient information, experts commented.
Prime Minister has just asked the Ministry of Construction to promulgate regulations on amendments and supplements to construction standards for condominiums, condotels, resort villas, officetels and rooms for rent.
Positive signs have been seen in Vietnam’s condotel arena after two years of downturn as consumption in the third quarter of this year was reported at 86 per cent compared to below 40 per cent in the same period of 2018.
While condotel is expected to regain popularity in the near future, Danang’s second-home villas market sees no sign of improvement throughout and after the first half of 2019.
Despite unclear legal framework for condotels, investors evidently have persistent interest in its potential for great future returns. On the contrary, the supply of second-home villas is still forecasted to be inadequate, Colliers International reported.
Although many people are keen on condotels, the Government has yet to create a legal framework for this property segment, experts said.
The rapid growth of Airbnb and condotels is posing significant challenges to traditional hotel business in Vietnam.
Due to the unclear regulations on condotels, the market in Da Nang slowed down in the first quarter, according to Colliers International Vietnam’s Quarterly Knowledge Report.
Appearing in Vietnam three years ago, condotels have not yet been properly integrated into the country’s laws on property buying, selling, and management. The Vietnamese government is considering the issuance of a law to fill in this hole. Dao Nguyen, managing partner of DN Legal, draws up four scenarios and solutions to deal with this new property type.
Despite the lack of a legal framework and phantasmagoric profit commitments, condominium-hotels (condotels) have been one of the most attractive property products among buyers, Bich Ngoc reported