In early 2022, Mr. Le Tuan Anh (Hoang Mai district, Hanoi) selected an apartment project in Cau Giay district (Hanoi). The apartment Mr. Tuan Anh bought is priced at 55 million VND/m2, belonging to the high-end segment. With an area of more than 100m2, the amount of money he has to pay is up to nearly 6 billion VND. But when he was trying to manage the finances to “close” that house, Mr. Tuan Anh saw a stir in public opinion about the proposal to own a limited-term apartment. This information made him and his wife temporarily stop buying to recalculate.
“6 billion dong is a big asset for me and my wife, so if the apartment building cannot be owned forever, I don’t want to spend such a large amount of money to buy it.“, Tuan Anh said.
According to Mr. Tuan Anh’s calculations, with 6 billion dong, if you put it in savings, you and your husband also receive nearly 30 million dong in interest every month. This money can be used to rent an equivalent luxury apartment in Cau Giay area.
“I accept to spend 6 billion VND to buy an apartment because in addition to living, it is also an asset for the couple to leave for their children. But if the apartment is only owned for a limited time, it’s like we’re renting a house for a long time“, Tuan Anh expressed.
Mr. Tuan Anh said, although the Ministry of Construction affirms that all interests of the buyer are still guaranteed, the administrative procedures when no longer the owner can be complicated, causing many difficult problems to be resolved and You don’t want to be in that situation.
Sharing the same opinion, Ms. Tran Mai Lan (Dong Da, Hanoi) also said that she had just refused to buy 2 apartments for investment because she saw that the profit problem was almost nonexistent if the proposal to own a term was approved. perform.
Mai Lan further analyzed, with current housing prices, the problem is about economy Buying an apartment will not be more profitable than renting a house.
For example, a luxury apartment of 70 m2 costs about 4 billion VND. If this amount is at least deposited in a bank, the monthly profit is about 20 million VND, and there is enough money left over to rent a similar apartment.
Meanwhile, if you only own it for a limited time, then the apartment will return to its true nature as a house only for living. If you want to sell it, the price must be reduced deeply.
“I plan to buy 2 apartments in Dong Da district for investment, but with the proposal of a limited-term ownership apartment, I will definitely lose a lot, at least at this time and in the first time if the proposal is approved. via. Because these are “sensitive” times, people have not been able to adapt to the new regulations, will have the mentality of turning their cars, not wanting to buy apartments anymore. For investors like me, it will certainly have to be calculated carefully, waiting until the market and buyer’s psychology is stable to continue.“, Mai Lan said.
Many experts also predict that, if the proposal of “apartment use period of only 50 – 70 years” is applied, the liquidity of the apartment market will be affected.
Mr. Vu Kim Giang, General Director of Joint Stock Company Real estate According to Hai Phat analysis, then the price of apartments with a term of ownership may not differ much from the price of apartments owned permanently because the land tax between the two types is not too different. This will make it harder for businesses to sell.
According to Dr. Su Ngoc Khuong, Senior Director of Investment Department of Savills Vietnam, real estate is always understood as an asset with added value in the future. If the regulation of apartment ownership with a definite term is applied, the cash flow is likely to shift from apartments to townhouses or land plots. This will have a significant impact on the liquidity of the apartment market.
Recently, the Ministry of Construction has written to clarify the proposed content of regulations on the duration of apartment ownership, which is currently receiving mixed opinions from the public.
In particular, the Ministry of Construction emphasized, the proposed regulation on the duration of apartment ownership still ensures the interests of people living in apartment buildings, because in the above policy proposal, the Ministry of Construction Construction has also proposed specific situations to handle.
Accordingly, people are still allowed to exercise the rights of property owners such as buying, selling, gifting, and inheriting during the apartment building’s ownership period. If the quality of the apartment building is still safe, the owner will continue to own it. In case the apartment building must be demolished for rebuilding, it will be handled according to the policy on renovation, demolition and reconstruction of the apartment building, and the residents who currently own the apartment building (such as the former owner or the buyer). donation, inheritance, etc.) still have the right to resettle at the old location without having to move to another place. In case the State plans to build public works or security and defense works at the old location, the people will be resettled at another location according to the general resettlement policy of the State.
In addition, the proposal stipulating the term of ownership of an apartment building according to the term of use of the apartment building does not mean that the term of the apartment building is only 50-70 years. Currently, according to the provisions of the law on construction, the useful life of the work is determined according to the construction design documents (design life) and the actual use term. The design life of the building must be clearly stated in the design documents and related documents (maybe 50-70 years or longer depending on the specific project).
At the end of the useful life, the competent authority will inspect and evaluate the quality of the work to allow it to continue using or demolish for rebuilding. Thus, the term of ownership of an apartment building can be 50 years, 70 years or it can be longer, 80, 90 years…depending on the quality of the work.
According to the Ministry of Construction, the above proposal will not lead to people switching from buying apartments to buying individual houses, due to the desire to own houses for a long time. Because, specifying the term of ownership of an apartment building will have an impact on the selling price of the house because the selling price will be lower than that of long-term ownership.
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