Deputy director of the Housing and Real Estate Market Management Department Nguyen Manh Khoi said agencies are still arguing about definitions of condotels and proper management.
Some agencies consider condotels a type of housing, while others argue it is just a tourism product.
However, under current laws, houses are not to be used for non-accommodation purposes. But a condotel is not recognized as a ‘house’.
It is also still unclear which laws will be referred to for dispute settlement.
‘Housing’ is understood as long-term residential property. Under the Tourism Law, tourism apartments or villas are just accommodation facilities, not houses. Therefore, condotel must not be managed as a house. Condotel owners don’t have the rights that house owners have.
In addition, local authorities interpret legal documents in different ways.
VTC News cited sources as reporting that investments poured into condotels in 2017 accounting for 60% of total investment in the real estate sector.
Meanwhile, Dien Dan Doanh Nghiep reported that condotels were the most discouraging real estate market segment in 2017 with supply on the rise and consumption on the decrease.
Twenty-two new projects were launched on the market last year, providing 14,741 condotels, an increase of 12% over 2016 (13,121). However, only 33% sold (4,821), which was just equal to 55% of 2016 (8,726).
While the supply was abundant, the absorption rate of the market was low, just 40-50%. The figure was 19% only in Khanh Hoa market, where signs of oversupply have appeared.
A number of large projects with thousands of condotels each have been launched. The condotel developers all promise attractive profit of 8-12% per annum for 5-10 years and holiday share of 15-20 days a year.
Commenting that the resort property segment in 2017 cooled down compared with 2016, DKRA Vietnam, a market analysis firm, said the only ‘bright spots’ in the market were the appearance of boutique hotels and shophouses.
However, the number of boutique hotels and shophouses remains modest and don’t bear an impact of the supply and have been marketed to explore market demand.FLC’s chair Trinh Van Quyet said he believes that if legal problems can be clarified, the cash flow into condotels will be increasing more sharply.