Each week we post a news flash with notable articles related to the real estate market in Vietnam. We asked our team to pick the top stories from the past month and we’ve tallied the results. Check out the headlines that made big news in our office below. Have any of the articles we’ve shared impacted you? Is there any important news we’ve missed? We’d love to hear from you!
We hope you and your loved ones are staying safe and healthy. The CVR team is here to answer your questions at any time. Whether buying, selling, renting, or opening a business, contact us to talk about your real estate needs today.
Your Friends at Central Vietnam Realty.
SEPTEMBER 2022 CENTRAL VIETNAM REAL ESTATE NEWS SUMMARY
1. What are the new opportunities in Da Nang real estate?
Although there are still shortcomings related to projects that are behind schedule, projects that are wrong in the equitization process, and projects that raise capital illegally, looking at the overall picture of the real estate market, there are still some shortcomings. Da Nang real estate still has bright spots with many new development opportunities.
The residential real estate market in Da Nang and surrounding areas recorded positive signals in terms of supply and consumption in most segments
Medium-term opportunity: Implementing the housing law, the Da Nang City People’s Committee has approved the city’s housing development program for 2020 and orientation to 2030. This adjustment of the housing development program in Da Nang city is expected to open up many new development opportunities for the city’s real estate market in the near future.
Long-term opportunity: Da Nang city, agreed with the identification of 3 pillars to focus on development: The first pillar is tourism associated with resort real estate and an international event center, and The second pillar is the economy. knowledge economy, The 3rd Pillar is a high-quality service center
2. Should invest in real estate during an inflationary period or not?
Inflation increased, bank lending rates also increased, and many policies to tighten the real estate market made investors worried. Even, the market has appeared the psychology of investors who want to “withdraw”.
However, according to experts, the volatility of the market does not push this investment channel into a difficult situation. In fact, the optimistic scenario of real estate will soon appear.
Despite the volatile market, real estate is still an attractive and safe investment channel.
Investors are often afraid of risk, so they don’t put their eggs in one basket. The real estate channel is still a bright investment channel at the present time.
That asset value is a factor investors will pay attention to, but do not forget about liquidity when assets freeze.
Transaction costs can be caused by buying or selling prices, but don’t forget the time spent in financial transactions is also an expense. Transaction costs also need to be considered in addition to profits and value created.
It is important because real estate has always been an attractive investment channel. It is important to invest in which segment, where the most profitable place is to invest money. In my opinion, in the context of rising inflation and interest rates, it is best not to use financial leverage to invest. If you can choose the right segment of quality and high profitability, let’s go down.
3. Avoid letting litigation at the seaside projects in Dien Ban, Hoi An: Urges the ministry of construction.
The Ministry of Construction has issued Official Letter 4276/BXD-QHKT to the People’s Committee of Quang Nam province guiding the problems in the management of detailed planning of 1/500 projects in the coastal area from Dien Ban town to the city of Hoi An.
According to the report of the People’s Committee of Quang Nam province, the general planning of the coastal area from Dien Ban district to Hoi An city with a planning scale of 1,586,6 hectares was approved in Decision No. 603/QD-UBND dated 20 February 2013 of the People’s Committee of Quang Nam province (hereinafter referred to as General Plan 603) to concretize the master plan for the development of coastal tourism and population from Dien Ban district (now Dien Ban town). to Hoi An town (now Hoi An city) approved by the Provincial People’s Committee in Decision No. 2240/QD-UB dated June 16, 2003 and adjusted and completed in Decision No. 1527/QD-UB dated 15/ April 2004 (referred to as the 2004 Tourism Planning).
The total area of the approved 1/500 detailed planning is about 1,288.5ha/1,586.6ha, accounting for 81.2% of the total area, basically covering the area of the 603 General Plan (remaining the general infrastructure items, green tree trails along the traffic axis, riverside, coastal; sandbank, water surface) and has attracted a total of about 63 projects according to the 2004 Tourism Planning. put into operation, form tourism establishments according to the orientation of tourism planning 2004.
According to the Ministry of Construction, according to Clause 4, Article 29 of the 2009 Law on Urban Planning, “The approved subdivision planning project is the basis for determining construction investment projects in urban areas and formulating the plan for urban planning. However, the area of 1,586.6 hectares within the scope of General Plan 603 has basically covered the detailed planning of 1/500 of the main functions; investment projects have been identified and called for since 2004; the projects have been put into operation to meet the local socio-economic development needs.
The organization of zoning planning of an area of 1,586.6 ha in 02 urban areas (Dien Ban town and Hoi An city) according to the current Construction Law is no longer the basis for detailed planning and determining investment projects.
Therefore, according to the Ministry of Construction, the People’s Committee of Quang Nam province is responsible for and directs the implementation of investment projects according to the approved 1/500 detailed plans on the basis of the 603 General Plan ensuring the principles of: does not change the spatial orientations, land use functions and planning criteria of the approved General Plan 603.
Besides, ensuring publicity, and transparency, prioritizing community interests, not affecting the lives of people living in the area; no complaints and disputes.
Importance: This is to ensure the consistency between planning levels, synchronous connection in spatial organization, landscape architecture, social infrastructure, technical infrastructure, and environment between the 603 General Plan and the urban planning of the province. Hoi An city, Dien Ban town (general planning, subdivision planning) is being developed and approved in accordance with current legal regulations on urban planning.
4. The restricted duration of apartment ownership is once more proposed by the Construction Ministry
The Ministry of Construction is collecting comments on the draft Housing Law (amended). In particular, the Ministry has proposed two options to regulate the duration of apartment ownership. In detail:
Option 1: Adding a new regulation on the apartment building’s ownership term, which is determined based on the building’s useful life in accordance with the construction law.
Option 2: Keeping the current regulations (without stipulating the term of apartment ownership, apartment buyers are entitled to own houses associated with stable and long-term land use rights).
With option 1, the condominium ownership term is applied to commercial apartment buildings, social apartment buildings, resettlement apartment buildings, and public service apartments. The term of ownership of an apartment building is determined according to the usable time of the work stated in the design documents of the apartment building project appraised by the competent authority and is counted from the time of acceptance of the entire communal house project put into use.
The draft also clearly states that, when appraising apartment building design documents, the appraising agency must specify the term of use of the apartment building in the design dossier. At the same time, the ownership term. apartment building” must be stated in the Certificate issued to apartment owners or other area owners in the apartment building (hereinafter collectively referred to as apartment owners), unless the owner is Government”.
The Ministry of Construction proposes a plan to own an apartment with a term of time.
The ministry also offers a plan to handle when the apartment building is still in possession or has expired.
Accordingly, in case the apartment building is still under ownership but is damaged due to incidents, natural disasters, enemy sabotage, fire and explosion, it no longer meets the conditions to ensure safety for continued use (collectively referred to as apartment buildings). subject to urgent demolition), the People’s Committee of the province shall notify and relocate the apartment building owners for demolition, reconstruction and resettlement. The State is responsible for allocating funds from the central budget to demolish and rebuild houses.
Importance: The proposal of the limited time of ownership will help the building to be renewed after a certain time to avoid the collapse of the building and create a good living standard for residents.
5. Does removing the land price range result in higher house and land prices?
Regarding the revised Land Law Project being submitted by the Government to the National Assembly, in which there is a breakthrough highlight of removing the land price range, talking with reporters, Assoc. Prof. Dr. Nguyen Dinh Tho – Director of the Institute of War According to the MONRE policy strategy, in the revised Land Law Project, the Ministry of Natural Resources and Environment has specified very specifically the required contents of the land price range and the land price list as well as the specific land price. Accordingly, the land price range is the basis for the People’s Committees of provinces and cities to issue land price lists and determine the financial obligations of people and businesses. In addition, during the implementation of the 2013 Land Law, MONRE twice developed a land price range (in 2014 and 2019).
Many people are afraid that the land price range will be removed, the market price will be determined closely, and the annual tax obligation of people and businesses will increase. Therefore, when building the land price range and land price list in 2014 and 2019, we carefully considered how to determine the price so that the financial obligations of people and businesses do not increase too high.
In the provisions of this Draft Land Law, MONRE also seeks how to harmoniously resolve the relationship. With each policy instrument, one goal can be achieved.
One is to build land prices in line with market prices. The second is to ensure that the financial obligations of people and businesses are not too large every year to ensure social security and socio-economic development.
6. VinGroup Chairman’s newly established real estate company is similar to a real estate investment trust (REIT)?
Yesterday, Mr. Pham Nhat Vuong – Chairman of the Board of Directors of VinGroup will contribute 90% of the total 18,000 billion charter capital of the new real estate company (VMI) with Vingroup shares.
It is expected that about 50 investors will invest in a part of this large real estate fund, with property rights certificates and a commitment to share profits at a minimum level.
No need for a large amount of capital, individual investors can still own their own real estate portfolio. The benefits of investing in these REITs are better liquidity than traditional real estate investments, diversification of investment portfolios, and fairly good and stable income if the management is good.
However, the level of profitability of REITs does not match that of traditional real estate, and investors incur relatively high transaction and portfolio management costs.
As always, CVR is at your service and happy to provide help anyways we can!
Contact Us today to find the real estate investment in Da Nang which is right for You