In recent years, a huge increase in the condotel segment has fastened the implementation of new regulations.
The standards and regulations on management and operation of condotels and officetels would be issued within this year to avoid any negative impacts on the new segment, Minister of Construction Pham Hong Ha said at the discussions of the National Assembly last week.
The minister claimed: “Local authorities cannot manage thousands of condotels without a legal framework. We have worked with the Ministry of Natural Resources and Environment to review regulations on land use in order to consider giving ownership for this type of property, since it has not been included in any regulations so far.”
At present, Ministry of Construction (MoC) is co-ordinating with the ministries of Culture, Sports and Tourism as well as Natural Resources and Environment to issue the regulations for this real estate type. Mr Ha noted: “This task must be done as soon as possible since there are signs of oversupply of condotels in the market recently.”
Since condotels have been listed in accommodation for tourism, then they must be regulated under the legal framework of the tourism sector, now under the Ministry of Culture, Sports and Tourism, said Nguyen Trong Ninh, Head of the MoC’s Department of Housing Management and Real Estate Market. Thus, condotel developers must be given licences by the Vietnam National Administration of Tourism.
The function of condotels is not yet clearly identified as for living or leasing. Economist Nguyen Tri Hieu explained: “If it is a product for lease, it must obey all taxation and land use regulations for business. In this case, a clear legal framework can help condotel developers take a mortgage at the bank for mobilising investment capital. If it is a housing product, it can be given a land use certificate so that owners’ rights can be protected.”
Also, Chairman of the Vietnam Real Estate Association Nguyen Tran Nam emphasised it was necessary to have a flexible plan for condotel development and investment.
He pointed out: “The fact is that thousands of condotels units are being constructed and any regulation would be a great impact to those, therefore the incoming regulations must be harmonised to benefit different sizes, and to benefit developers, buyers, policymakers, and local authorities. The planning should be based on demand and must be designed to create demand.”
The legal framework for condotels will help developers and buyers to believe in the prospects of the condotels they have bought, added Nguyen Toan Thang, director of the Ho Chi Minh City Department for Natural Resources and Environment.
He said: “A legal framework would facilitate the socio-economic development of any locality. Legal frameworks must be continuously updated to be suitable to the growing demand of society.”
In Vietnam, supply of condotels has been strongly increasing, and now occupies 56 percent of the total rooms for tourists, while hotel rooms occupy only 44 percent.
Various condotel projects have been built nationwide since 2014, especially in coastal localities and tourist hubs. About 20,000 condotels units are expected to enter the market by 2020.
