What are 50-year apartments?
Currently, there is no legal definition of what constitutes a 50-year apartment. However, Clause 1, Article 172 of the 2024 Land Law provides for the duration of land use as follows:
Article 172. Land for temporary use
…
c) The duration of land allocation or lease for investment projects using land shall be considered and decided based on the duration of the investment project or the application for land allocation or lease, but not exceeding 50 years.
For projects with a duration of more than 50 years as prescribed by the Investment Law, the duration of land allocation or lease shall be in accordance with the duration of the project but not exceeding 70 years.
Upon expiration, if the land user wishes to continue using the land, the State shall consider extending the land use duration but not exceeding the duration prescribed in this Clause.
In case there is no need to establish an investment project, the land use duration shall be considered based on the application for land allocation or lease but not exceeding 50 years;
…
Accordingly, 50-year apartments can be understood as apartments that can only be used for 50 years from the time the State allocates land to the investor. Enterprises that are allocated land for construction are only allowed to use it for 50 years, after which the land will be used for another project or public works…
Types of 50-year apartments
– 50-year apartments with a pink book: This type of apartment has the same characteristics as apartments with permanent ownership, but after 50 years, if the apartment is still habitable, the pink book will be extended.
– 50-year rental apartments: With this type of 50-year apartment, when the lease expires, it is considered terminated, and there will be no compensation or permanent residence registration.
Advantages and disadvantages of 50-year apartments
The 50-year apartment model has both advantages and disadvantages. One obvious advantage is that the selling price is usually lower than that of long-term ownership projects, providing home ownership opportunities for young people, small families, or those with short to medium-term housing needs. Many 50-year projects also boast prime locations in central areas, ensuring their usability and potential for development.
With a good understanding of the legal framework, buyers can rest assured about the liquidity when it comes to transferring ownership. However, the biggest drawback lies in the hesitation of some customers, which can slow down transactions and result in less aggressive price increases compared to long-term ownership apartments. Additionally, banks may exhibit caution when it comes to mortgage loans for this type of property, especially when the remaining duration on the pink book is short.
As land resources become scarcer, the emergence of 50-year apartment projects is inevitable. Many experts believe that buyers should accept the reality that for modern apartment buildings, 50 years is already a long time, and even long-term projects may need major renovations after 40 to 50 years of use.
What really matters is the construction quality, investor reputation, and project location, rather than solely focusing on the “50-year” factor. With reasonable prices, these apartments can be a suitable choice for those who need immediate accommodation but are not willing to pay a premium for long-term ownership projects.
In conclusion, “50-year apartments” are not a “trap” as many people think, but rather a segment with a specific role in the market. Understanding the legal nature of this type of property will help buyers feel more confident in their purchasing decisions.
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