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| Latest real estate: Ministry of Construction proposes 2 options for developing mini apartments. (Source: Tuoi Tre) |
Get opinions on mini apartment development
The Ministry of Construction has just submitted a report on the acceptance, revision and completion of the draft revised Housing Law to the Government . In this report, the Ministry of Construction presented two options for developing multi-storey housing with many apartments for households and individuals (also known as mini apartments).
In option 1, the Ministry of Construction proposes the following issues:
Firstly , households and individuals have the right to use residential land according to regulations. When building a house with 2 floors or more, each floor has a design and construction of apartments for sale or rent-to-own, each apartment must meet the conditions for being an investor in a housing construction investment project. At the same time, the investment in construction must comply with the provisions of the law on construction and relevant laws on housing construction investment projects.
The sale and lease-purchase of apartments specified in this clause shall be carried out in accordance with the provisions of this law and the law on real estate business. The issuance of certificates for each apartment specified in this clause shall be carried out in accordance with the provisions of the law on land.
Second , households and individuals have the right to use residential land according to regulations. When building a house with 2 or more floors, each floor has a design and construction of apartments for rent, the investment in building this house is carried out according to the provisions of the law on construction for individual houses, and the management of fire prevention and fighting safety according to the provisions of the law on fire prevention and fighting for individual houses combined with production and business.
Third , the management and operation of housing specified in Clause 1 and Clause 2 of this Article shall be carried out in accordance with the Regulations on management and use of apartment buildings issued by the Minister of Construction.
Fourth , People's Committees at all levels, within the scope of their duties and powers, are responsible for inspecting and examining the compliance with housing requirements and conditions prescribed in Clauses 1 and 2 of this Article.
Fifth , the Government details this Article.
Option 2
Regarding option 2, the draft amended Housing Law revised by the National Assembly Standing Committee stipulates:
Firstly , except for the case where an individual has the right to use residential land as prescribed in Clause 3, Article 54 of this Law to build a house with 22 floors or more, each floor of which is designed and constructed with 2 or more apartments for rent, the requirements prescribed in this Law and the conditions must be met.
That is, the house must have a private use area of the apartment, a common use area of the house and have equipment for common use;
Apartments in housing must be designed and built in a closed manner, with the floor area standard for each apartment not lower than the area according to the National technical regulations on apartment buildings;
Housing must have a construction permit according to the provisions of the law on construction;
Must meet the requirements on design and fire prevention and fighting assessment as prescribed for apartment buildings.
Second , the housing specified in Clause 1 of this Article may not be sold or rented out for apartment purchase.
Third , in case of building a house with a scale of 20 apartments or more, it is necessary to have sufficient conditions to be an investor in a housing construction project according to the provisions of Article 35 of this Law and must establish a project to implement housing construction investment according to the provisions of law.
Fourth , the management and operation of housing prescribed in this Article shall be carried out in accordance with the Regulations on management and use of apartment buildings issued by the Minister of Construction.
Fifth , the provincial People's Committee shall specify the traffic conditions for fire trucks at residential areas to serve as a basis for granting housing construction permits as prescribed in this Article. The People's Committees at all levels, within their scope of duties and powers, shall be responsible for inspecting and examining the compliance with the requirements and conditions prescribed in Clause 1 of this Article when individuals rent out apartments in multi-storey multi-apartment houses.
Ministry of Construction chooses option 1
The Ministry of Construction stated its view on choosing option 1. Because implementing option 1 will limit the development of multi-storey houses by households and individuals, designing many apartments that do not comply with construction permits, do not meet regulations and standards, especially regulations and standards on fire prevention and fighting as has happened in the recent past.
In addition, the Ministry of Construction found that for individual houses (not subject to the need to establish a housing construction investment project), the law has specific provisions on construction investment management as well as fire prevention and fighting safety management.
At the same time, according to the Ministry of Construction, the draft Law also proposed not to issue Certificates of land use rights and house ownership rights for each apartment when constructing individual houses with multi-storey and multi-apartment designs. Therefore, it is not necessary to set out requirements to distinguish common and private use areas...
In addition, the Ministry of Construction also proposed that the management and operation of individual housing in the form of multi-storey houses and apartments for rent be managed according to the Regulations on management and use of apartment buildings issued by the Minister of Construction.
New townhouse supply is low, prices remain high
JLL Vietnam's recent Hanoi housing market information shows that in the third quarter, the market for townhouses (villas, townhouses, and townhouses) in Hanoi continued to extend its "hibernation" state, with most projects temporarily locking their product lists and rebuilding their price lists and policies.
Investors are being very cautious, prioritizing legal procedures or construction progress rather than the bustling pre-sale activities like in the previous phase.
Similarly, according to Savills Vietnam, the housing market in Hanoi in the third quarter was quite quiet with low transaction volume and investors being cautious about launching new supply.
New supply continues to be limited, the supply-demand gap remains a challenge. However, the market has seen positive factors that are expected to gradually promote recovery in the future.
According to this unit, the supply of new apartments in Hanoi in the quarter continued to decrease by 47% quarter-on-quarter and 65% year-on-year, down to 1,891 class B apartments. Notably, the market did not record any new supply of classes A and C in the last quarter.
Primary apartment supply reached 19,808 units, down 3% quarter-on-quarter and 6% year-on-year, with Class B accounting for 92% of the supply. The number of apartments sold continued to decrease by 16% quarter-on-quarter and 42% year-on-year to 2,100 units.
Regarding the supply of villas and townhouses, the market recorded no new projects, only 30 new units from existing projects in Thanh Tri. New supply of low-rise segment decreased by 76% quarter-on-quarter and 94% year-on-year. The number of units sold in the third quarter decreased by 5% quarter-on-quarter and 66% year-on-year to 101 units.
High inventory prices have pushed up primary prices across all product types. Primary apartment prices reached VND54 million/m2, up 2% quarter-on-quarter and 13% year-on-year. Primary apartment prices have increased for 19 consecutive quarters and are 77% higher than in Q1/2019.
Similarly, the average price of primary villas increased by 3% quarter-on-quarter to VND103 million/m2 of land. The price of townhouses also increased by 9% quarter-on-quarter to VND190 million/m2, while the price of shophouses also recorded a 6% increase quarter-on-quarter.
Limited new primary supply has helped the secondary market gain popularity. In the apartment market, the secondary price reached VND36 million/m2, up 2% quarter-on-quarter and 8% year-on-year. Meanwhile, the average secondary price of low-rise products reached VND23 billion/unit, up 5% quarter-on-quarter, but still 19% lower than the primary price.
Beach villas, condotels with deep losses
According to experts, with the Government's drastic intervention, the real estate market has been experiencing positive changes. Many real estate segments have begun to resume transactions.
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| In August 2023, the resort villa segment had modest market demand, with consumption only 15% compared to the same period (Source: cafef.vn) |
However, the resort real estate market is still in a gloomy state. According to a survey by Dan Tri reporters, information about selling villas and condotels at a loss in some localities such as Da Nang, Nha Trang (Khanh Hoa), Phu Quoc (Kien Giang), Quang Ninh... is still happening densely on real estate listing sites.
In addition to the "huge" priced villas, many condotels in some resort real estate projects are being advertised for sale at a loss.
For example, at the FLC Grand Hotel Ha Long resort (Quang Ninh), many condotels are being advertised at a loss of 500-600 million VND. Specifically, a condotel on the 19th floor of the hotel has a purchase contract price of 1.47 billion VND with the investor, but now the owner is selling it at a loss of 950 million VND. Similarly, another condotel has a loss price of 1.1 billion VND, while the purchase contract is 1.7 billion VND...
According to DKRA, in August, the resort villa segment had modest market demand, with consumption only 15% compared to the same period last year. Most transactions in the month focused on products priced under VND10 billion/unit.
Notably, market demand remains quite low, with only 17 new units sold in August, equivalent to 14% compared to the same period in 2022. The primary selling price of the condotel segment has not fluctuated much compared to the previous month and continues to remain high due to the current high cost of capital. Specifically, in the South, the selling price fluctuates from 55.5 to 81.7 million VND/m2, while in the North, the price is in the range of 35.5 to 44.2 million VND/m2.
The 'land fever' period is over, Quang Tri plans to divide lots into smaller lots and lower selling prices.
According to Vietnamnet, after the land fever, many auctions had no buyers because of high floor prices and large plots. Quang Tri province is planning to divide plots into smaller plots and lower selling prices to "heat up" the real estate market.
In early 2022, in some localities in Quang Tri province such as Cam Lo district, Lao Bao town (Huong Hoa district), Trieu Phong district and Dong Ha city, there was a "crazy" land fever.
The land fever has passed, and from the end of 2022 until now, the real estate market in Quang Tri has begun to fall into a slump. According to observations, not only land transactions between people have been interrupted, but auctions organized by the government have also stagnated due to the lack of participants.
This situation caused Quang Tri to only collect 194 billion VND from land auctions in the first 9 months of 2023, reaching only 24% of the target.
One of the reasons why local land auctions are currently facing difficulties and there are no buyers is because the floor price is high and the area of land put up for auction is large.
Mr. Ha Sy Dong, Permanent Vice Chairman of the People's Committee of Quang Tri province, said that the locality is planning and changing plans to increase revenue from land auctions.
According to Mr. Dong, the impact of geopolitical factors in the world, after the Covid-19 pandemic, has caused many difficulties for the economy, leading to a sluggish real estate market.
“In the face of large plots of land with high floor prices not attracting investors, the People's Committee of Quang Tri province has directed the Department of Construction to preside over and, together with relevant agencies, research plans to reduce plot area and lower floor prices to increase purchasing power.
Based on legal regulations and advice from departments and branches, the Provincial People's Committee will develop new plans to attract investors to participate in auctions, increasing local revenue," Mr. Dong shared.
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