Resort real estate stagnates in the first month of the second quarter of 2024

"Freeze" supply and liquidity

According to DKRA's April 2024 real estate market report, resort villas are the type with the most positive signal when recording 38 units of a project opening for sale in the next phase joining the supply, an increase of 2.2 times over the same period. The new supply is 100% concentrated in the Northern region.

Meanwhile, market demand is very low, with only 2 units sold, down 33% year-on-year, mainly distributed in product groups priced under VND15 billion/unit.

Villas are the most active type in the resort real estate market.

The primary selling price level has not changed much compared to the previous month and is still at a high level. Policies on profit/revenue sharing/commitment, interest rate support, principal grace period, etc. continue to be applied to increase liquidity.

In addition, legal problems have prevented many projects from being launched, while high-value inventories have made liquidity difficult, and investor confidence has not yet recovered, which are also the main reasons why the market remains gloomy.

New supply and consumption in the month of resort villas

Regarding townhouses and resort shophouses, the market has not recorded any new supply for sale. Many projects have continuously postponed their sales launch in the current difficult context, causing new supply to be limited.

Overall market demand remains low, transaction volume is modest and mainly focuses on primary products, with complete legal documents, guaranteed construction progress and prices under 10 billion VND/unit.

Primary prices have not fluctuated much, while the secondary market has recorded some products with prices decreasing by 30% - 40% but still facing liquidity difficulties. Sharp decline in purchasing power, lack of new supply, legal problems, etc. have caused significant obstacles in the first months of 2024, causing the market to almost fall into a "prolonged hibernation" cycle.

Supply and consumption of townhouses/shophouses is 0

Similarly, the Condotel segment also did not record any new supply openings during the month, the market remained in a prolonged gloomy state. Many projects have legal issues that cannot be resolved, in addition, many investors have continuously postponed the time of sales implementation, causing the supply to be limited in the market.

Overall market demand is low, primary consumption is mainly focused on products with a total value of less than 3 billion VND/unit. Primary selling prices have not fluctuated much compared to the previous month. Preferential policies, interest rate support, quick payment discounts, etc. are still widely applied.

Difficulties in legal matters, capital sources, investor confidence, etc. have affected both supply and consumption, causing the market to remain in a prolonged state of stagnation with no signs of recovery in the short term.

The market is still of interest to foreign investors.

Commenting on Vietnam’s resort real estate market, Mr. Mauro Gasparotti, Director of Savills Hotels Asia Pacific, said that many foreign investors still highly appreciate the potential of the resort real estate market in Vietnam. However, there are still many barriers for foreign investors, especially regulations and procedures related to project development.

Therefore, investors often tend to look for assets that are already in operation, especially quality hotel and resort projects in the 5-star segment in central cities such as Ho Chi Minh City and Hanoi. However, these assets are often quite scarce in the market, as well as less open to transfer needs.

For example, in Phu Quoc, the market has many advantages to become an international destination. However, most of the supply in the market currently only focuses on providing rooms without paying attention to the customer experience. The market needs to diversify accommodation products such as hotel projects with design highlights, true luxury resorts, etc.

Resort real estate in Vietnam still receives attention from foreign investors

Choosing the right model and product that suits market conditions and customer needs is an important factor to ensure the successful development of a project. Therefore, when planning a project, investors need to consider carefully if choosing the shophouse model because in Phu Quoc there are currently many sources of this product, and most of them have not been put into commercial exploitation.

Regarding the condotel type, Mr. Mauro Gasparotti said that some other markets in the Southeast Asian region also witnessed a period of hot development, such as Bali (Indonesia) in 2008, and now this market has passed the "new project boom" phase, instead of slow but quality development.

“In general, every market will go through a certain cycle. However, compared to Thailand and Indonesia, the Vietnamese market faces more challenges. Vietnam recorded a large number of condotels launched for sale, especially in the period 2016-2019 with an estimated average of 12,000 products launched for sale each year. In addition to the large supply, many products launched during this period raced to commit to profits with attractive time and rates, without careful consideration of overall operating results,” said a Savills expert.

To develop this market in the coming period, Savills experts also believe that improving infrastructure is an important premise to promote domestic tourism. The clearest example is Phan Thiet tourism, since the completion and operation of the expressway project has boosted the demand of domestic tourists, especially from the Ho Chi Minh City market when travel time has been shortened to only 2-3 hours.

Besides infrastructure, the market also needs to diversify tourism products as well as pay more attention to tourists' experiences and amenities.

Source: https://www.congluan.vn/bat-dong-san-nghi-duong-dam-chan-tai-cho-trong-thang-dau-quy-ii-2024-post294757.html