When will resort real estate pass the 'hibernation' phase?

Sharp decline in 2023

According to a report recently released by the Vietnam Association of Realtors (VARS), only 3,165 new resort real estate products have joined the supply, down more than 80% compared to 2022. Of which, the majority of the supply is concentrated mainly in the Central region with more than 1,200 products.

In the first half of 2023, with the market "frozen", many investors stopped implementing or postponed sales. In the last 2 quarters of the year, supply showed signs of improvement but was only about 30% of the same period last year. New products are mainly concentrated in the condotel type.

When does vacation real estate pass the dormant stage? — The volume of resort real estate transactions in the fourth quarter of 2023 increased slightly compared to previous quarters.

In terms of liquidity, some projects also recorded a large number of transactions, although not significant compared to 2022, but it is a positive signal for the current market context. Especially in the Phu Quoc area, recording hundreds of transactions at a new project has helped this market show signs of improvement, bringing confidence to investors.

However, according to VARS, the transaction volume has not recovered as expected because some projects that many investors are interested in are facing legal problems and cannot be released. Meanwhile, the inventory is mainly high-end, high-value products that have to compete directly with products that investors bought at a loss.

Regarding selling prices, there has been a 50% decrease in the secondary market, but liquidity is still difficult. Especially for villas and resort shophouses with high value of over 10 billion VND. Primary prices have increased slightly compared to previous offering stages because the projects are nearly completed and are focusing on infrastructure, utilities and services. Apartment products have shown signs of good recovery at the end of the year, recording a slight increase of about 3-5%.

Resort real estate will recover slowly

According to VARS's forecast, in 2024, tourism and resort real estate will have the opportunity to improve thanks to the general recovery process of the market, as well as positive signals from macro factors, but not much, increasing by about 20% compared to 2023. In particular, the beach apartment segment will be the highlight because it both meets the need for ownership and can be exploited for rent, creating cash flow.

In addition, in 2024, the tourism industry sets a higher target of welcoming 17-18 million international visitors, serving 110 million domestic tourists, and total revenue from tourists reaching about 840 trillion VND. If the set goals are achieved, resort real estate will recover faster in the following stages.

When does vacation real estate pass the dormant phase 2? — Beach apartments and tourist apartments have attracted many investors in recent times.

In addition, the positive signal of resort real estate also comes from a series of measures to remove difficulties and improve the legal framework for condotels. Specifically, the Ministry of Construction has studied and issued amendments and supplements to the standards for condotels. Along with that, the Ministry of Culture, Sports and Tourism issued management and business regulations and the Ministry of Natural Resources and Environment issued specific guidance documents on land use regimes for this type.

In addition, Decree 10/2023 of the Government, effective from May 20, 2023, also paves the way for granting certificates of ownership of construction works used for tourist accommodation purposes in accordance with the provisions of the law on tourism (condotel, resort villa, etc.), creating hope for investors and developers.

Recently, the Ministry of Natural Resources and Environment also issued Official Dispatch No. 10829 to the People's Committees of provinces and centrally-run cities requesting to review and direct the organization of the issuance of certificates for tourist apartments, tourist villas, office apartments combined with accommodation... in accordance with regulations.

Combined with visa exemption policies, upgrading the transport infrastructure system with a focus on international airports will be a great driving force to help the tourism and resort real estate industries develop strongly.

However, according to many experts' forecasts, although there have been many positive signals, the tourism and resort real estate sector will continue to face many challenges and can only turn things around if the tourism industry achieves impressive results.

At the same time, when the real estate market enters a new cycle, customers and investors will focus on types that meet real housing needs such as apartments, individual houses, townhouses with affordable prices. Speculative types such as land will recover more slowly and finally resort real estate, a type affected by many other factors.

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