Resort real estate remains sluggish.

Báo Tài nguyên Môi trường•26/09/2023

Resort real estate is the segment facing the most difficulties as the real estate market declines.

According to DKRA Group's real estate market report, the resort real estate segment did not experience significant changes in July and August. In the resort villa segment, only one new project was launched, offering 40 units, a decrease of 88% compared to the same period last year. The downward trend in new supply has continued from the end of Q2 2022 until now. Many projects have repeatedly postponed their sales launch due to lower-than-expected reservation deposits, resulting in a sharp decline in supply – only equivalent to 12% compared to the same period last year.

Besides the decrease in supply, demand is also modest. Amidst the difficult market conditions, relatively high asking prices, and cautious investor sentiment, liquidity remains sluggish. Primary selling prices have not fluctuated much compared to June 2023. Many developers continue to offer interest rate support programs and quick discount incentives of up to 40-50% to stimulate buyer demand.

Mr. Quang (a real estate agent specializing in resort properties in Ba Ria - Vung Tau ) stated: "To stimulate the market, the developer has offered many incentives, including discounts for quick payments, grace periods for principal repayment, and interest rate support for the projects our company is distributing. Thanks to these policies, many customers have shown interest in learning more about the projects, but very few are willing to make a purchase. Currently, the market remains sluggish."

According to experts, legal issues, interest rates, and the slow recovery of the tourism industry are also contributing factors to the continued sluggishness of the resort real estate market. When the market declines, high-value properties become even more difficult to sell. This is currently the case with resort villas, where sales in August were only 15% compared to the same period last year, despite many developers continuing to offer interest rate support programs and quick discounts of up to 40-50%. A few transactions in August were mainly concentrated in relatively affordable properties, priced under 10 billion VND per unit.

Mr. Vo Hong Thang, Deputy Director of R&D at DKRA Group, stated that in the past two months, two resort townhouse projects, both in their next phase, offered 95 units to the market. Despite a significant change in supply, only one unit was sold. Meanwhile, condotels appear to be recovering better, with three projects launched in July 2023, offering 405 units, but only 113 units were sold. However, transactions were concentrated in only one project, while other projects still faced liquidity shortages.

“The supply of condotels in the past two months has decreased by more than 77% compared to the same period last year. The challenging macroeconomic environment and the tourism sector not recovering as expected are factors contributing to the unfavorable transaction situation. It is predicted that residential real estate will recover first because it is an essential product, coupled with the return of economic growth. After accumulating savings, customers will then consider resort real estate, which is considered a second home,” Mr. Thang said.

Assessing the market situation in the coming months, Mr. Le Hoang Chau - Chairman of the Ho Chi Minh City Real Estate Association - believes that although the supply and demand for resort real estate have recovered, the recovery is insignificant. This indicates that investors in this sector still face many difficulties ahead, as cash flow from sales remains low while inventory continues to increase.

"When the real estate market is sluggish, the tourism and resort real estate segment is usually the most severely affected, because in difficult times, customers will drastically cut back on investments with large asset values but which are not practical. Therefore, in addition to waiting for the overall market to recover, developers need to offer sales policies with appropriate prices, flexible payment options, extended payment schedules, and good interest rate support to stimulate demand," Mr. Chau analyzed.

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