Recently, the real estate investment resort is often referred to by real estate professionals in Quang Binh, Phan Thiet, Nha Trang, Da Nang, Phu Quoc, Quy Nhon.
This picture still has many problems that make the progress not as strong as expected, because the condotel line (apartment – hotel) still has many legal barriers, causing investors and businesses anxious.
One of the major risks to investors of this type is that the profit from the project may not reach the desired level, affecting the committed profit.
Potential real estate resort
According to Prof. Dang Hung Vo – Former Deputy Minister of Natural Resources and Environment, now resort property is developing strongly, supply lower than demand, but nowhere to buy, no place to care.
Recent resort real estate develops when investors see the potential of the tourism industry. However, tourism in Vietnam is still unstable. Many tourists shook their heads with questions back. Vietnam is not as good as other developed tourism real estate properties, despite the advantages of Vietnam. In addition to the unique heritage, we have yet to create other factors that can attract foreign tourists.
“One problem is that we do not yet have transparent data to enter the market. So what secondary investors know what to do? In Vietnam, there is a lot of crowd psychology. This is a way of thinking unprofessional investment when there is not enough data before investing in a project”, Mr. Vo wondered.
Economic expert, Dr. Nguyen Tri Hieu acknowledged: This is a new business, profitable and has potential development. But there are still many legal, environmental and dependency issues in the tourism industry.
“I do not say yes or no, but I see a good business opportunity. Most of the projects being offered now are quite aggressive but they have not been put into operation and this makes us feel nervous. Investors or buyers, secondary investors do not think much about the risk of the second home. Buyers often buy products through advertising images that are not fully recognized in the first type of investment or the product line that you buy.
Commitment to profit is also a matter of concern. Investors should be more concerned to be able to make this commitment a reality. In addition, when run-of-the-mill owners pledge to profit invisibly generates a market race that makes it difficult for buyers to identify and choose the right product for the value.
We emphasize that instead of being chased by the crowd, the movement that creates surplus supply should focus on product models that fit the actual market demand. For example, with a limited service model, when traveling people they just simply bed to sleep, do not need too many things. Therefore, the new models meeting the real needs of the people are important”, Hieu shared.
Le Hoang Chau, Chairman of the HCMC Real Estate Association, said that the market for serviced apartments, condotel, officetel apartments has been developing very well big, many in the past, there are signs of over demand. The proportion of condotel apartments now stands at 56%, higher than the hotel room supply, which accounts for only 44% of total supply is unusual. In other countries, the supply of condotel condos is often lower than that of hotel rooms and resorts. At the same time, the owner committed to profit up to 12% / year in 8-12 years is too high, not sustainable development, the potential risk factor for secondary investors. At the same time, the legality of this type of product is not clearly defined in the Housing Law.
The same opinion, lawyer Tran Thai Binh – Ho Chi Minh City Bar Association said: there is no clear legal framework specialized in real estate business resort. In the texts available, the term resort real estate, or condotel, has not even been explicitly defined. At present, there is no facility to issue certificates of ownership of resort real estate products and if so, depending on each project.
According to Binh, some localities also have “innovations” in legal interpretation of ownership provision. For example, if a project is approved as a project of real estate for vacation, it is sold but the land use rights that the investor is holding are in the form of annual land rents paid by the state. Legally, it is not possible to sign a purchase contract for sale to a buyer. Therefore, buyers are also unlikely to have an LUR.
Legality is complex because there is a possible project that may or may not be stable in the long run. It is difficult to have the correct answer for the people who want to test it, depending on the specific project that is being considered. Therefore, care should be taken with regard to legal issues.
From the perspective of the economist, Mr. Hieu acknowledges: The type of resort real estate is new in Vietnam, there are not many people involved in the business here. This type of travel must rely on tourism if it does not attracts tourists, real estate resort will be difficult while this is a very sensitive industry with changing circumstances such as politics, or any other incident in the country or region. Not to mention, Vietnam is one of the countries most affected by climate change and this can have a long-term impact on tourism, thereby affecting resort real estate. In addition, people’s income is low to buy resort property. So this can be considered as investment playground for the rich.
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