Resort real estate has experienced a year of 'sliding'

A recent report by the Vietnam Association of Realtors (VARS) shows that in 2023, the whole country will have about 3,165 new resort real estate products for sale, down more than 80% compared to 2022. In the fourth quarter of 2023 alone, about 913 new products were launched on the market, down 70% compared to the same period last year.

New supply is concentrated in the provinces of Quang Ninh, Phu Quoc, Da Nang... Most of which come from the Central region with more than 1,200 products, equivalent to about 38% of the total market supply.

The resort real estate has gone through a year of sliding 1 — The resort real estate market is "flooded" with information about cutting losses and reducing prices in 2023.

In terms of liquidity, the entire market recorded 726 successful resort real estate products traded in 2023, down 93.5% compared to 2022. In the primary market, selling prices showed signs of a slight increase compared to the time of offering due to projects entering the completion stage, with infrastructure and utility systems being formed.

In the secondary market, the news of price cuts and price reductions has also caused resort real estate products to reduce their selling prices by up to 50%. It is worth mentioning that despite being advertised for sale at a loss, liquidity in the market throughout the year has been extremely limited.

Similarly, DKRA Group's data also shows a sharp decline in the supply and consumption of resort real estate when only 2,542 units were opened for sale in 2023, down 58% compared to the previous year. The consumption rate reached 21% (equivalent to 526 units), only 13% compared to 2022.

The resort townhouse/shophouse segment recorded about 3,271 units, down 62% compared to 2022. Market demand decreased sharply with 366 units sold, equivalent to 6% compared to last year. Transactions were mostly concentrated in projects with prices under 10 billion VND/unit.

The condotel segment recorded 5,937 units for sale, with a consumption rate of about 20% (1,164 units). Market liquidity was low, with transactions concentrated in projects with products under VND3 billion/unit.

Forecasting the market situation in 2024, DKRA believes that the condotel type is expected to decrease in supply compared to 2023, fluctuating around 800 - 1,000 units, mainly concentrated in Ba Ria - Vung Tau and Quang Binh. Meanwhile, the supply of resort villas will fluctuate at 250 - 300 units, while the supply of resort townhouses/shophouses will fluctuate at 200 - 300 units.

In terms of demand, the market will continue to decline and last until the end of 2024. The primary price level will remain stable and there will be few clear fluctuations next year. Discount policies, interest rate support, principal grace period, rental commitments, etc. will continue to be widely applied by investors in 2024.

The resort real estate has gone through a year of sliding 2 — Incentive policies and discounts of up to 40% still cannot "save" market liquidity.

These policies, although attractive, are not enough to change the difficult situation of the resort real estate market. Instead, this market needs the recovery of the tourism industry to have the motivation to regain growth momentum. At the same time, investors still need to have a sustainable development orientation and focus on quality rather than quantity.

Commenting on the resort real estate market, Mr. Mauro Gasparotti, Director of Savills Hotels, said that the oversupply of resort real estate stems from the creation of products that are not suitable for the market reality. Some investors rushed to participate without thorough research, leading to a gap between supply and demand in many areas. In addition, some resort projects also appear to focus on quantity over quality.

This expert believes that resort real estate has not yet escaped the gloomy situation, many old projects are behind schedule, construction is slow, affecting market confidence. Although bank interest rates have decreased, the number of people willing to borrow money to invest is not much, the 'defensive' mindset is still in the majority. Therefore, from the fourth quarter of 2023 to the second quarter of 2024, the transaction volume will hardly have a sudden change. After this time, the market will improve thanks to the State's moves to remove legal obstacles through revised laws.

Source