Golden knight rides to rescue

The nation’s infant second home market is slowly finding its feet

Luxury properties have traditionally dominated Vietnam’s second home market, but developers are now looking to cash in on the demand for mid-end second homes.

This move is part of a general trend towards diversification in the second-home market in this country with developers driving their investment towards small- and medium-sized products.

These can be sold at affordable prices and meet the demand of various types of customers. This trend started at the end of last year when developers shifted their portfolios to mid-end second-homes in a bid to cope with the low transaction in all other segments. In the northern provinces, Archiland is selling second homes in areas around Hanoi. Until last year, the company focused on selling high-end second homes priced at  VND15-18 billion ($717,000 to $861,000) per unit.

However, from April of this year, Archiland will start selling second-home villas at what it says “lowest prices” on the market. The company plans to sell 68 houses of Dien Vien Village, part of Zen Resort in Ba Vi district, 50 kilometres from Hanoi. The starting price tag will be VND850 million ($40,600) for a home with a total land area of 220 square metres. Nguyen Thanh Nam, general director of Archi Invest Joint Stock Company, said second homes on the city’s fringes had many advantages compared to those in other areas.

“Investing in second homes in the city’s outskirt areas is safe because the majority of those projects have red books which permit the users to use them for a long time,” Nam said. Nam added that more customers can afford mid-end second homes in such areas because they cost only a twentieth of equivalent homes in the city centre. Other benefits included convenient transportation, good services and good infrastructure.

Moreover, Nam said investing in second homes in the city’s outskirts also brought other benefits in terms of rental possibilities. For example, a VND5 billion ($230,000) villa in Nine Ivory project in Ba Vi district was guaranteed to bring a revenue of VND18 million ($861) per month from leasing to tourists.

And last but not least, mid-end second homes could still sell in a dormant real estate market because the majority of their owners were long term end-users, and not short-term speculators as was the case with many other projects.

Apart from Dien Vien Village, there are many other mid-end projects appearing in the north. Green Oasis Joint Stock Company has recently launched its Green Oasis Villas in the Luong Son district of Hoa Binh province. These turn-key units carry prices of VND1.5-2.5 billion per unit ($71,700-$119,600).

INT Group is selling the Dong Chanh Villas 3 project, also located in Luong Son district at VND820 million ($39,230) per land plot and VND1.45 billion (69,370) for an unfurnished villa.
In the south, Venesia land plots in Nha Trang city are also attracting customers because of reasonable prices. Cen Group chairman Nguyen Trung Vu said customers could buy a Venesia villa for VND7.5 million ($358) per square metre in the project, the master plan of which was designed by PTW. Customers only have to splash out VND570 million ($27,270) for a plot to build a townhouse or VND2 billion ($95,684) for a villa.

Many other mid-end second-home projects are well absorbed. According to the latest report by Archiland, mid-end projects such as Nine Ivory in Ba Vi district and Melody Villas in Hoa Binh province were seeing good sales. Twenty-four of the 27 villas in Nine Ivory’s first phase have already been sold, while the investor of Melody Villas has sold 42 of a total of 108 villas.

“With the real estate market trending down, we aim to focus on the end-users and increase services while strictly keeping construction to schedule,” Nam said.