Recently, Ministry of Natural Resources and Environment issued the new guideline about the land use regime and the certification of non-residential construction works ownership, which is expected to be the positive signal for Vietnam hospitality market.
Regarding the regime of commercial and service land use which is prescribed in Article 153 of the Land Law: The land use term is specified in Clause 3, Article 126 of the Land Law, that the land lease term for commercial and service purposes (second-home villa, condotel, officetel…) is considered and decided on each investment projects or applications for land rent, but not more than 50 years.
Sharing his comments about this new guideline, Dr. Su Ngoc Khuong, Senior Director of Investment, Savills Vietnam said:
“This new guideline brings some positive signals to Vietnam real estate market at the start of 2020, especially for hospitality developers and investors. If the guideline is officially implemented, it will be a great support and leverage for the hospitality sector, in the context that the market is deeply affected by Corona disease in the global scale.
Generally speaking, hospitality market investors have two main sources of income: selling second-home villas and condotel and entertainment activities and leisure services in their projects. Currently, as the revenue of hospitality services has dramatically dropped, investors can take advantage of the fact that the buyer is entitled to own the property certificate (the red or pink book), to stimulate the needs of buyers, thereby preserving the initial investment.
For individual investors, this is also considered a positive move, as the real estate market in big cities like Hanoi or Ho Chi Minh City is facing numerous issues related to legal problems or limited supply. They will also be more assured in proactively increasing profits by owning a new type of property such as a second home, condotel or office-tel.
From supporting the hospitality real estate, the business with strong industry links with over 50 related industries: banking, construction, machine materials, tourism ..., a part of the Vietnam economy foundation in general will also benefit from that.”