Resort real estate supply will plummet in 2023
Recently, resort real estate has been one of the segments most heavily affected by legal problems and capital flow difficulties. As a result, a series of resort projects stretching from the coastal provinces fell into a state of land and fallow.
Project legal issues also seriously decreased the confidence of new investors. Customers who have spent money to buy a resort project are “bored” and complain when they cannot sell.
According to DKRA Group, in 2023, resort real estate will record a sharp decrease in supply and consumption compared to the same period in 2022. Specifically, in the resort villa segment, the market recorded 2,542 units. Primary supply will come from 67 projects in 2023, down 58% compared to the previous year.
Resort real estate is heavily affected by legal problems. Photo: Gia Linh
The consumption rate reached 21% (equivalent to 526 units), only 13% compared to 2022. Most of the supply comes from the Central region, accounting for 36% of total supply and 86% of total primary consumption globally. market. The primary selling price level did not change over the same period and continued to remain at a high level, about 6 – 155.7 billion VND/unit. Although many sales policies are applied such as commitment/profit sharing, interest rate support, principal grace period, quick payment incentives, etc. to increase liquidity, they are not as effective as expected.
Meanwhile, the townhouse/resort shophouse segment recorded primary supply in 2023 coming from 34 projects, providing about 3,271 units to the market, down 62% compared to 2022. Market demand decreased sharply. with sales reaching about 366 units, equivalent to 6% compared to last year. Most transactions are concentrated in projects with complete legal status, developed by large investors and priced below 10 billion VND/unit.
Meanwhile, the condotel segment in 2023 recorded 5,937 units launched for sale from 45 projects (including 4 new projects). The ratio of consumption to primary supply reached 20% (1,164 units). Market liquidity is low, transactions are concentrated mainly in projects with complete legal status, developed by financially strong investors and with product value under 3 billion VND/unit. The primary price level did not change compared to the previous year and remained anchored at a high level due to high input costs.
New supply of resort real estate decreased. Photo: Gia Linh
Meanwhile, according to data from the Vietnam Real Estate Brokers Association, in 2023, the country will receive about 3,165 new tourism and resort real estate products, down more than 80% compared to 2022.
The entire market recorded 726 tourism and resort real estate products successfully traded in 2023. The number of transactions has not recovered as expected because some projects that many investors are interested in are facing problems. Due to legal reasons, it cannot be sold yet. While the inventory is mainly high-end, high-value products, they must compete directly with loss-making products from previous investors.
Resort real estate is difficult to recover quickly
Mr. Nguyen Van Dinh – Chairman of VARS said that in the gloomy picture, the resort market suddenly received a “glimmering” bright spot from the end of 2023. Accordingly, there are positive signs of recovery from the real estate market. and tourism push investors to speed up progress and “pump” supply into the market.
Specifically, in the fourth quarter of 2023, the condotel project in Phu Quoc has a price of about 55 million VND/m2.2, recorded 200 transactions out of a total of 400 apartments opened for sale within more than 1 month with the majority of customers being investors. Compared to previous years, this transaction volume is not much, but in the difficult context of the real estate market, especially the Phu Quoc area, achieving an absorption rate of over 50% is considered a positive sign.
However, the expert believes that hotel business activities still face many challenges, negatively affecting the process of demand recovery in some localities. Many solutions to retain and attract tourists have been applied. However, these stimulus measures still need time to “sink in” with the coordination of local authorities and industries to partly boost demand.
Resort real estate is still difficult to fully recover in 2024. Photo: Gia Linh
Sharing his views on resort real estate in the coming time, Mr. Pham Lam – CEO of DKRA Group predicted that there may not be many positive signs for resort real estate in 2024. Overall market demand continues to decline, lasting until the end of the year.
Accordingly, new supply will continue to decline, condotel is forecast to decrease compared to 2023, fluctuating around 800 – 1,000 units. Meanwhile, the supply of resort villas and resort townhouses/shophouses is forecast to be equivalent to 2023, fluctuating at 250 – 300 resort villas and 200 – 300 resort townhouses/shophouses, respectively. .
The primary price level remains stable and there are unlikely to be clear fluctuations in the coming year. To survive, businesses and investors must launch discount policies, interest rate supports, principal debt grace periods, lease commitments, etc., which will continue to be widely applied in 2024.