Coastal provinces shape up for real estate rejuvenation

Coastal provinces shape up for real estate rejuvenation, illustration photo

In the past two years, real estate prices in the central city of Danang and and the central province of Quang Nam have decreased by about 15-20 per cent, while many other areas have seen a drop of up to 35 per cent compared to 2019. But according to Nguyen Xuan Binh, deputy director of the Danang Tourism Department, hospitality real estate could be boosted with the city now on the list of five destinations allowed by the government to start a pilot to welcome international visitors.

“Welcoming international tourists back to Danang on a safe route will contribute to boosting the real estate market and Danang’s tourism in particular,” Binh said.

The pandemic has caused 98 per cent of tourism businesses in the city to suspend operations. Accommodation, riverside, and coastal real estate have all since been in a state of hibernation.

Representatives from real estate businesses forecast that the hospitality real estate market in both Danang and Quang Nam will have cautious growth for now, but perhaps even a boom period in 2022.

Nguyen Ngoc Thuy Linh, general director of Sun Property Group, insisted that Danang’s real estate market will soon rise thanks to tourism and the increasing quality of life.

“Last year the prime minister approved the adjustment of the general planning of Danang to 2030. The related projects will be gradually implemented, and many existing problems for real estate such as a shortage of supply and lack of new projects will be solved,” Linh said.

Linh added that 2022 will be the right time for Sun Property Group to develop more luxury and hospitality real estate segments.

The recovery of tourism will also lead to positive recovery signals of hospitality real estate in other destinations on the pilot list to open to international visitors – Phu Quoc, Nha Trang, and Quang Ninh, as well as other beaches which are famous for many luxury resorts, such as Phan Thiet and Vung Tau.

Nguyen Van Dinh, chairman of the Vietnam Association of Realtors (VARS), said land prices in coastal cities have increased sharply and are at a high level. Areas near the sea in Danang and Nha Trang can cost up to $15,000 per square metre, but some other locations like Quang Nam have a more reasonable price of about $1,300-2,000 per sq.m.

“The recovery of the tourism economy will open up good opportunities for investors in the hospitality real estate segment, and at the same time promote the market to be vibrant again,” Dinh said.

The number of hospitality real estate products in the country is still quite modest. According to data from the VARS, in 2020 there were 216 new tourism complex projects approved and constructed in 10 cities and provinces along the coastline, consisting of approximately 100,000 condotel units, 30,000 villas and resort villas, and over 15,600 shophouses. But among the latter, only 5,000 shophouses have been put into operation.

There is light at the end of the tunnel, according to a report from the VARS. Despite the pandemic, the hospitality real estate market in the third quarter gained a positive transaction volume. The number of products offered for sale in the quarter reached 7,206 units and transaction volume reached 2,280, equivalent to an absorption rate of 31.6 per cent.

However, to serve the goal of welcoming more than 50 million international tourists and nearly 200 million domestic tourists by 2025, Vietnam is required to invest in developing more resorts, giving priority to famous coastal tourist destinations such as Quang Ninh, Phu Quoc, Binh Thuan, Danang, Nha Trang, and Phan Thiet.