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September 2020 News Summary

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 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


The Top Real Estate News This Month

1.

In an article titled: “90% of millionaires in Vietnam are “pouring money” into real estate”, the author, Hung Vo, mentions that there are over 12,000 millionaires with $1 million or more in Vietnam and 90% of these millionaires are directly or indirectly involved in the real estate business. In particular, among the 100 richest people in Vietnam, who have over 30 million dollars, 99.1% are directly related to the real estate business.
With the number of millionaires and the current difficulties resulting from Covid-19, real estate experts say that Vietnam does not necessarily have to wait for foreign business but instead welcomes domestic business with great potential.
Regarding real estate investment trends, Mr. Nguyen Van Dinh, Deputy General Secretary of the Vietnam Real Estate Association, said that if investors have a lot of money, they should invest in real estate at this time. He believes that real estate is the safest, most profitable investment channel. Dinh suggested that in the past, there has been no crisis where real estate prices have decreased. On the contrary, it has steadily increased an average of 5-7%.
Interested in investing in Vietnam? Contact CVR for more information on available opportunities.
Source:  http://www.vietnamplus.vn/90-trieu-phu-dola-tai-viet-nam-deu-do-tien-vao-bat-dong-san/660331.vnp

2.

The next article we find attention worthy, by Tran Khang suggests:  Ministry of Construction to clarify the Sale And Purchase Agreement for Condotels.”
The Ministry of Construction is studying and clarifying the contents of the sale and purchase agreement for condotels and specifying the rights and obligations of the parties in these transactions.
According to the Ministry of Construction, there are about 30,000 tourist accommodation establishments and about 6 million square meters of offices for lease nationwide.
Specifically, about 16,500 officetel apartments (office combined with hotels) and 39,100 condotels (tourist apartments) have been invested and built.
But so far, the legal issues with condotels are still unclear. There are differences in point of views between the land management agency and the construction management agency in issuing pink books for condotels.
Regarding the concerns of condotel buyers, the Department of Competition and Consumer Protection and the Ministry of Commerce and Trade issued a notice advising investors and customers about the observance of the law to protect consumers’ concerns. The department confirmed that customers who buy condotel apartments are not consumers and are not subject to the Law on the protection of consumers’ interests. Disputes arising from these transactions are resolved in accordance with civil law. As a result, customers who buy condotels will not be protected by the consumer protection agency.
The laws applied to the condotel segment are unclear and need to be upgraded in order to protect customers who buy this kind of real estate property for investment. In doing this, the market will see sustainable development and customers will no longer face disadvantages. CVR keeps its finger on the pulse of the condotel market and the policies applicable to those buyers. Ready to learn more about investment opportunities in and around Da Nang? Contact the CVR team for information on current and upcoming condotel projects.
Source:  http://dantri.com.vn/bat-dong-san/bo-xay-dung-dang-lam-ro-hop-dong-mua-ban-condotel-20200903063839576.htm

3.

The title of the next article is quite self-explanatory: “Short-term property investments now have a 90% chance of losing”
In this article, author Dieu Hoa talks about the strong effect the pandemic has had on the real-estate market. It’s not a game for short-term investors any more.
During 2017-2018, the market grew strongly with high demands from investors. However, since 2019 all the real estate market indexes have been going down.
Mr Dinh, Chairman of the Real estate Agency Committee believes that real estate policies and laws have many weaknesses which have had an effect on the market as well. Many projects had to be postponed for inspections and 20-30 projects in each province were stopped. Big cities like Ha Noi have hundreds of projects in this situation.
Short term investors who have a weak finance foundation and use bank loans, will easily fail. Many investments that are successful are because the investor didn’t follow the crowd, and only saw results after 1-2 years.
Currently, investors are more careful with short-term investment in real estate.
Even though there are risks and difficulties, there is no denying that real-estate investment is a high profit channel. Among 100 richest people in Viet Nam, 99.1% of their assets relate to real-estate business.
CVR believes that while investors should consider the risks in making short-term investments, there are great opportunities. Considering investing in Vietnam? Contact our team of expert agents for information on available properties. 
Source: http://cafef.vn/luot-song-bat-dong-san-thoi-diem-nay-90-la-that-bai-20200909083723952.chn

4.

An interesting article by Linh Phuong, is titled: “What is registration tax? The most detailed way to calculate real estate registration tax in 2020”
1) What is registration tax?
Registration tax is a set fee that an individual or organization must declare and pay to the tax authority before an asset is put into use. For example, when buying a car, you must pay registration tax to register for ownership of that car.
2) How to calculate real estate registration tax.
The formula for calculating the land and house registration fee is specified in Article 5 of Decree 140/2016 / ND-CP as follows:
Housing/land registration tax = Price for calculating registration fee for house / land x 0.5%
In which:
-0.5% is the registration fee rate (specified in Clause 1, Article 7 of the above Decree)
-Price to calculate registration fee for a house = House area x Price of 1m2 of house x Ratio of the remaining quality of the house
*Note, the house area is defined as the total floor area, including attached works. The price of 1m2 of house is the actual price when building a new one for each m2 of floor. The percentage of the remaining quality of the house is determined according to the decision of the Provincial People’s Committee of each locality where the house is located.
-Price to calculate registration fee for land = Total land area (m2) x Price of 1 m2 of land
*Note, the total land area here is the total area of the parcel of land for which the right to use is registered by an organization / individual. The price of 1 m2 of land is determined based on the land price list issued by the provincial People’s Committee at the time of registration fee declaration.
For example, you receive a transfer of 100 square meters of residential land and need to pay registration tax to be able to apply for a Land Use Right Certificate for the land. At the present, the land plot is priced at 10 million VND / m2. Then, the price to calculate the registration fee for your land is calculated by (100m2 x 10 million VND = 1,000,000,000). Thus, the registration tax you must pay for this land is:
Registration tax you must pay = 1,000,000,000 x 0.5% = 5,000,000 VND (5 million VND).
Registration tax is one of the most commonly mentioned fees in the transfer of land use rights. At CVR we understand the importance of following tax obligations according to the law. Our experience, highly regarded reputation, and strong legal knowledge keeps us at the forefront of the real estate industry. Considering investing in Vietnam? Contact our team of expert agents today!
Source: http://batdongsan.com.vn/trinh-tu-thu-tuc/thue-truoc-ba-la-gi-cach-tinh-thue-truoc-ba-nha-dat-2020-chi-tiet-nhat-ar104953
5.
The next article we find attention worthy suggests EU investors consider a ship logistics project of nearly 1 billion USD in Vietnam
Investors of the EU intend to invest in the construction of the Cai Mep Ha Logistics Center project (Ba Ria-Vung Tau Province) with a budget of up to 1 billion USD.
Investors said the project can welcome large container ships to bring Vietnamese goods to the world. In addition, investors participate in promoting inland waterway transportation and transporting goods and agricultural products from the Mekong Delta to Cai Mep Ha and out to the world.
The Prime Minister, Nguyen Xuan Phuc, highly appreciates the significance of the investment cooperation between Vietnam and the EU in the context that the EVFTA has just come into effect.
The leader of Ba Ria-Vung Tau province said that the province had approved the plan, identified the project location and was ready for investors.
CVR property experts point out that this project will contribute to promoting trade between the EU and Vietnam, and aid in Vietnam’s economic development as seaports are the driving force behind the marine economy.  It also shows a strong commitment to cooperate between the EU and Vietnam in the future.
Source:   http://cafef.vn/nha-dau-tu-eu-muon-lam-du-an-logistics-cang-bien-gan-1-ty-usd-tai-viet-nam-2020091708314635.chn
6.
The last piece of news worth mentioning for the week is titled: “If I borrow 1 billion to buy a house, how much do I have to pay for principal and interest each month?”
The amount of interest and principal payable monthly:
With a loan of 1 billion VND, assuming you borrow at Techcombank for 20 years (240 months), the preferential interest rate for the first 12 months is 8.29% / year (equivalent to 0.69% / month). If the interest rate after the preferential period is 10.5% / year (equivalent to 0.875% / month), the total amount of interest and principal you must pay monthly are as follows:
During the offer period:
   * The first month to pay:
Interest = 1,000,000,000 x 0.69% = 6,900,000 VND
Principal = 1,000,000,000 ÷ 240 months = 4,166,666 VND
Total interest + principal = 6,900,000 + 4,166,666 = 11,066,666 VND
  * The second month to pay:
Interest = (1,000,000,000 – 4,166,666) × 0.69% = 6,871,250 VND
Principal = 1,000,000,000 ÷ 240 months = 4,166,666 VND
Total interest + principal = 6,871,250 + 4,166,666 = 11,037,916 VND
The same goes for months 3 through 12.
After the preferential period (from the 13th month on the principal balance is now 950,000,008 VND):
   * 13th month to pay:
Interest = 950,000,008 x 0,875% = 8,312,500 VND
Principal = 1,000,000,000 ÷ 240 months = 4,166,666 VND
Total interest + principal = 8,312,500 + 4,166,666 = 12,479,166 VND
  * The 14th month to pay:
Interest = (950,000,008 – 4,166,666) × 0.875% = 8,276,041 VND
Principal = 1,000,000,000 ÷ 240 months = 4,166,666 VND
Total interest + principal = 8,276,041+ 4,166,666 = 12,442,707 VND
The same goes for months 15 through 240.
Thus, the highest monthly amount of interest and principal for this loan will be 12,479,166 VND. The above information will help you understand a debt repayment plan and how to balance spending in the most reasonable way.
At CVR, we work with clients who need to take out a loan in order to purchase a property. Our team of experts will guide you through every step of the process including understanding payment terms and finding financing options that work for you. Considering buying but have questions about financing? Contact the CVR team today.
Source: http://batdongsan.com.vn/loi-khuyen-cho-nguoi-mua/vay-1-ty-dong-mua-nha-moi-thang-phai-tra-goc-va-lai-bao-nhieu-ar103080

7.

The next article we find attention worthy, by Linh Phuong, discusses “5 steps to buy a house or land that is financed in accordance with the Law of 2020”
Unlike normal transactions, buying and selling mortgaged real estate is only legal with the consent of the bank (mortgagee). Following the 5 steps below will ensure a safe transaction and compliance with the latest land law:
1) Step 1: Sign a 3-party commitment (Seller- Buyer- Bank accepted mortgage)
This written commitment will bind the rights and obligations of the three parties for the payment, breaches of contract, handling of property, etc. The agreed upon terms must be clear, specific, and regulate who will keep the pink book when the mortgage is released, and how to handle any arising situations.
2) Step 2: Real estate payment
The buyer will open an account at the bank taking on the mortgage, and deposit money into said account according to the payment schedule as agreed in the 3-party commitment.
3) Step 3: Notarized transfer contract
This is done after the bank receives money and completes the process to release the red book. At this time, the buyer and seller will go to a notary office together to complete a sale and purchase contract. The documents that both parties are required to prepare for notarization include:
– Identification papers (ID card, household registration book)
– Certificates of land use rights
– Certificate of the single status of the local committee of permanent residence or certificate of marriage registration
4) Step 4: Fulfill financial obligations
Similar to regular real estate transactions, mortgaged transactions must fulfill financial obligations including a registration fee and personal income tax (PIT), to be paid to the Tax Department as follows:
– PIT=2%*transfer price
– Registration fee = 0.5%* land area * land price
Note: the above land price is determined based on the land price list issued by the People’s committee at the time of transfer.
5) Step 5: Complete the name change procedure at the Land Registration Office
The buyer and seller need to prepare a registration form of changes, sale and purchase contract, certificate of land use rights, and documents showing the completion of financial obligations and submit to the Land Registration Office where the property is located. If the documents meet the requirements, the Land registration Office will confirm the transfer information and record it in the Certificate. The processing time is around 10 days.
Buying or selling mortgaged real estate? Our team of experts will guide you through every step of the process from understanding payment terms to fulfilling financial obligations. We’re here to answer all of your questions! Contact the CVR team today.
Source:  http://batdongsan.com.vn/trinh-tu-thu-tuc/5-buoc-mua-nha-dat-dang-the-chap-ngan-hang-dung-luat-2020-ar105071

8.

Another article we found interesting is titled: Trouble for buyers who don’t use real estate services”
Some buyers decide to forgo using a real estate broker and find trouble along the way. In the end, most buyers find that working with an agent results in a smooth transaction where all parties are happy.
Without brokers, buyers need a lot of time, effort, and patience. Conversely, paying a brokerage fee will help shorten the search process.
Professional brokers are often very knowledgeable about market prices. They know the history of properties and they can advise on legal procedures. They help negotiate the best price and provide consultation, legal assistance and so on.
With invaluable local and regional market knowledge, an extensive professional network, and up-to-date database of properties for sale and rent, CVR will guide you through every step of the homebuying or leasing process. We coordinate viewings, research comparable properties and other areas of interest, and negotiate on our client’s behalf to ensure the most attractive price and conditions possible. We also prepare and/or review the legal documents, update you on legal changes and challenges, and provide basic legal advice. In today’s constantly changing market, buyers and renters face an array of complex challenges and new opportunities. CVR can help!
Source: http://batdongsan.com.vn/loi-khuyen-cho-nguoi-mua/chuoc-du-rac-roi-khi-mua-nha-vi-tiec-tien-hoa-hong-cho-moi-gioi-ar105090
 
 

As always, CVR is at your service and happy to provide help anyway we can!

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