Except for apartments, all other segments are down.
On January 17, DKRA Real Estate Services Group (DKRA Group) has just announced the "Report on the Real Estate Market in Da Nang and its vicinity in 2023", presenting notable developments in the market and making some forecasts for 2024.
Accordingly, in 2023, the residential real estate market in Da Nang city and surrounding areas will receive positive signals in terms of supply and demand in the apartment segment. Most of the remaining segments will continue to decline from 2022.
Except for apartments, other real estate segments in Da Nang city and surrounding areas will decline in 2023. Illustration photo from the internet
Entering 2024, with positive moves to remove obstacles in legal procedures for real estate projects, reduce lending interest rates, as well as the "permeability" of State policies... it is expected to accelerate the market's recovery.
Except for the apartment segment, which received some more positive signals than in 2022, most of the remaining segments saw a significant decrease in supply and overall market demand.
Specifically, the land segment in 2023 in the market of Da Nang city and surrounding areas recorded 8 projects opening for sale with a new supply of about 696 plots, a significant decrease of 74% compared to 2022.
The absorption rate of new supply reached 31% (about 218 plots), only 15% compared to last year.
Transactions occurred mainly in the first 6 months of the year, focusing on products priced at 44.5 - 59.5 million VND/m2 in Da Nang city and 10.6 - 11.3 million VND/m2 in Quang Nam province.
The primary price level recorded an average decrease of 7% to 9% compared to the previous launch. Discount policies, profit commitments, bank support... were applied by investors to stimulate market demand.
The secondary market recorded an average decrease of 8% - 10% compared to the beginning of the year, locally in product groups with legal problems, delayed implementation, delayed handover of certificates to customers, etc.
The apartment market recorded 14 projects for sale during the year with the primary supply of the whole market falling to about 1,731 units, an increase of 29% compared to 2022, mainly distributed in Da Nang city.
The absorption rate of primary supply reached about 42%, equivalent to 734 units, up 66% compared to the previous year. The overall demand of the whole market recorded an increase of 9 percentage points compared to 2022, but most of it came from only one newly launched project in Ngu Hanh Son district, Da Nang city.
Transactions are concentrated in mid-range projects, priced from 50 to 60 million VND/m2, with completed legal procedures, developed by reputable investors with strong financial potential.
Primary selling prices recorded a slight increase of 3% to 5% in the next phases of the project but were supported by many policies such as quick payment discounts, principal and interest grace periods, etc. from the investor.
Real estate liquidity is expected to continue to face many difficulties in the coming time.
Meanwhile, in the secondary market, most sellers proactively reduced prices by 2% to 6% compared to the beginning of the year, expecting to increase liquidity.
The townhouse and villa segment in the Da Nang city market and surrounding areas recorded primary supply from 15 projects, about 882 units, down 46% compared to 2022.
A series of projects have stopped due to legal problems, businesses lacking capital and being affected by general market difficulties, etc.
This has negatively impacted investor sentiment, causing market liquidity to continuously decline from mid-late Q2/2022 until now.
Overall demand is low, with consumption only equivalent to 16% compared to last year, with transactions occurring mainly in the townhouse product group with an average price of less than 10 billion VND/unit.
Primary selling prices remained unchanged, while the secondary market recorded an average price decrease of 5% - 7% compared to the same period, concentrated in projects that have been implemented for many years, are behind schedule and have not completed legal procedures.
The resort real estate segment in 2023 continues to record a downward trend in supply and consumption in all segments. Most of the current market supply comes from inventory of previously launched projects.
In the resort villa segment, primary supply remained low, at 62% over the same period, mainly concentrated in Quang Nam and Thua Thien Hue, accounting for about 86% of the total primary supply in the whole market.
Overall market demand decreased significantly, recording the lowest level in the past 5 years and equal to 7% compared to 2022.
Real estate liquidity is expected to continue to face many difficulties in the coming time and there are no signs of recovery in the short term. Illustrative photo
Transactions decreased in most projects, with consumption mostly concentrated in projects that have been handed over and operated by reputable brands in the market. Primary prices remained unchanged compared to the same period last year and remained high. Policies on profit sharing, revenue, principal grace period, interest rate support, etc. continued to be widely applied to increase liquidity.
In the townhouse and resort shophouse segment, primary supply continued to decline, only equivalent to 16% over the same period, mostly coming from primary projects that opened for sale last year, but no transactions were recorded.
The primary selling price level has not fluctuated much compared to 2022, the current asking price ranges from 7.1 - 16.3 billion VND per unit. The secondary market alone has not recorded any transactions.
In the context of a sluggish general market, an economy with many challenges, unresolved legal issues, and difficult access to credit capital, liquidity is expected to continue to face many difficulties in the coming time and there are no signs of recovery in the short term.
The condotel segment in 2023 recorded a significant decrease in primary supply, only 61% compared to the same period, mainly due to the inventory of old projects that were opened for sale before. Overall market demand is low, consumption is only 3% compared to 2022, transactions are mainly concentrated in product groups with selling prices ranging from 3.0 - 4.0 billion VND/unit. The primary price level has not fluctuated much compared to the previous year. However, the market recorded some secondary listings with prices 10% - 15% lower than the contract price from customer groups using financial leverage.
Difficult to create a breakthrough in 2024
According to forecasts from DKRA Group, the supply of land plots in 2024 may decrease slightly compared to 2023, fluctuating around 450 - 550 plots, mainly concentrated in Da Nang city and Quang Nam. Thua Thien Hue area continues to have a shortage of new supply. Primary price levels continue to trend sideways compared to 2023.
Liquidity and secondary prices will continue to decline in 2023, especially in projects that have not completed legal procedures and customers using loans.
In the apartment segment, new supply in 2024 may fluctuate between 800 and 1,000 units, mainly concentrated in Da Nang city.
The proportion of Class A apartment supply is expected to increase, mainly distributed in Ngu Hanh Son district.
Primary selling prices have not fluctuated much or have slightly increased due to pressure from input costs. Policies on quick payment discounts, support for principal and bank loan interest deferrals, etc. continue to be promoted to stimulate market demand.
Interest rate support policies, payment extension policies, etc. continue to be applied by many investors in the current sluggish market context.
New supply and demand for townhouses and villas in 2024 will continue to be scarce and similar to 2023, fluctuating around 200 - 250 units, mostly coming from the next phase of previously launched projects.
Overall demand may increase slightly but there is unlikely to be a sudden change in the short term and will focus mostly on projects with complete legal procedures. The primary price level continues to remain stable, while preferential policies and quick payment discounts continue to be widely applied.
Regarding resort real estate, it is expected that the supply of resort real estate in Da Nang and its surrounding areas will continue to remain low. Market liquidity is expected to face many difficulties and there will be few short-term breakthroughs. Primary selling prices will remain stable.
Policies to support interest rates, principal grace period, payment schedule extension, etc. continue to be applied by many investors in the current sluggish market context.
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