Allowing foreigners to own tourism real estate is like exporting real estate on the spot but we do not need to spend a lot of money to increase capital for the industry.
If used well, it will help the market develop sustainably. At the same time, this is also a channel to promote and stimulate increased revenue for Vietnam’s tourism industry. That is the judgment of Mr. Mai Duc Toan, Director of Sales and Investment Division of CNT Group.
Covid-19 recurrence, “reclaimed” resort real estate
Toan said the resort real estate market was difficult after the Cocobay event, which is now more difficult when the Covid epidemic broke out. Current customer confidence with this segment is low. The intrinsic real estate itself has had unresolved shortcomings such as: The project’s legal, the issue of issuing a book or not? Defining the rights, responsibilities and obligations of the investor and the operator. Therefore, real estate resorts are really “infused” double.
In particular, the Covid – 19 epidemic had a negative impact on the economy in general, the tourism industry was most affected. Undeniably, the resort real estate market only develops when the tourism market recovers and develops.
However, now there is an outbreak of Covid 19, the situation of the disease is quite complicated and unpredictable. If the epidemic situation is difficult to control, it is likely that there will be a second round of social isolation, at which time the whole market will continue to fall into a second state of pause. In which, tourism continues to be a subject hardest hit.
“Therefore, I think that the market in the remaining months of 2020 will be more difficult. The situation may be better in the second half of 2021 provided that the world has good control of the epidemic and find vaccine released this year, “said Toan.
According to the latest Savills Vietnam market report, the real estate market for the first 6 months of 2020 is the worst performer ever due to the blockade policy. Room occupancy decreased by 36 percentage points year-on-year to 32% while room rates fell 13% year-on-year to US $ 74 / room / night. The pressure from low occupancy led to a 21% decrease in average room rate by quarter. The 5-star segment is most heavily affected by dependence on international visitors. According to Ho Chi Minh City Department of Tourism, the number of international visitors in the city in the first 6 months of 2020 decreased by 69% year on year to 1.3 million. Those figures show that the Covid-19 epidemic had a significant impact on the resort real estate segment in Vietnam.
Need stimulant dose
“According to my observation, from the first half of 2020, the resort real estate market will almost fall into hibernation. To solve the difficulties of the current market, many synchronous solutions are required. In addition to legal issues of the project including the provisions on the rights and obligations of the investor, the operator, the grant of sovereignty, etc., stimulating market demand is one of the effective solutions at this time. Current tourism real estate needs strong stimulant medicine to recover and develop, “Mr. Toan emphasized.
In fact, Vietnam has allowed foreigners to own real estate under Article 159 of the Housing Law 2014. However, the ownership is limited to residential real estate (apartments and separate houses of the first project. investment in construction of houses not in areas to ensure national security and defense according to the Government’s regulations).
For real estate vacation law does not allow foreigners to own. Most recently, on June 18, 2020, the Ministry of Construction proposed amending and supplementing the Real Estate Business Law towards allowing foreigners to buy tourism real estate.
According to Mr. Toan, for foreigners to own tourism real estate is like exporting real estate on the spot but we do not need to spend a lot of money to increase capital for the industry. If used well, it will help the market develop sustainably. At the same time, this is also a channel to promote and stimulate increased revenue for the Vietnamese tourism industry.
In particular, in the context that the current resort projects are facing many challenges, this is a useful and practical solution to help the market demand increase significantly, further to recover the excitement of the market. school, helping investors feel more secure about vacation real estate.
In which, allowing foreigners to own resort real estate brings the following advantages: Increasing the overall demand of the market; Attracting foreign currency capital; Attracting tourists to Vietnam due to the fact that the owners of resort real estate in Vietnam will be sharing a 15-20 night vacation at the project they buy.
However, allowing foreigners to own real estate needs to ensure security and national defense. For real estate resorts, if permitted by law, it is required to specify the locations and areas of foreigners allowed to buy.
Sharing about the purchase rate / tourism real estate project, Mr. Toan said that it is difficult to say the specific number, but currently the law has prescribed the ownership of foreign real estate for foreigners. with residential real estate in Vietnam does not exceed 30% of the project’s product volume.
For tourism real estate we need to have specific regulations for each regionc will be how much? How long is the ownership? Customers’ rights and obligations are foreigners? Conditions of assignment? Renewal issue when the time of ownership expires? All on the principle of ensuring the national security and defense.
Ha Vy.