The risks are behind the land fever in Da Nang

Da Nang real estate market: Select ground land or resort property?

Compared to the land market is relatively cheap in the south of Da Nang. The real estate market also has hot fever. However, many experts warned that the real estate market in Da Nang is very attractive but also potential risks.

Da Nang tourism real estate hot growth is also bearing many risks

According to a report from the Da Nang Tourism Department, in the first 6 months of 2017. The city has welcomed about 3.23 million tourists. Of which international visitors accounted for 38%. International arrivals have increased by 36% and domestic arrivals by 11% over the same period in 2016.

The first half of 2017 is proportional to tourism. The real estate market will receive one 5-star hotel and three 4-star hotels.

Supplying over 1,000 rooms.

Raising the total supply of 3 to 5 star resorts is up to 13,000 rooms.

It is expected that by the end of this year, the market will welcome an additional 3,800 rooms from 21 hotels to be opened. Raising the total number of guest rooms is up to 16,800, up 40% from 2016.

This is the highest number recorded between 2014 and 2017. And forecasting the next two years, the growth of supply will be from 7-9% per year. By 2019, there will be a total of 19,600 hotel rooms in the 3-5 star segment.

The 4-star coastal hotel experienced the highest rate of 8.8% per annum in average room revenue. This segment also recorded the fastest increase in new office supply in the last four years. In the second quarter of this year, overall hotel sales recorded better numbers. same period last year. Average price of 4-5 star segment is $115 / room / night.

A luxury hotel project has just started construction and is expected to hit the market in 2019

About this issue in the Danang market, Ms. Duong Thuy Dung- Head of market research and development consulting CBRE Vietnam said: “Recently, a series of four-star hotel was launched. Especially, the hotels located on Vo Nguyen Giap route, bring high-class, modern and affordable resort services. Next time, this route will welcome more buildings and will also be more diverse in the type of real estate.

Many risks from the market are recovering.

In the last two years, Danang has witnessed the amazing growth of coastal real estate. Especially type of condominium resort (condotel). For the purpose of investing many customers is to rent to profit in the future.

In the first 6 months of 2017, the Da Nang market has received another 520 luxury apartments. Raise the total supply of this market to 6,715 units.

Dung said: “The wave of investment, especially coastal resort real estate is taking place strongly in Da Nang. The main reason is probably because the investor wants to meet the demand of tourists before and after the APEC 2017. At the same time, the investors also bravely implemented many projects, especially the condotel project also to catch a new trend. Because this segment is different in Vietnam. “

Many high-end hotel projects are still being built on the Vo Nguyen Giap Road

In addition, the villa segment is a little more sedate than the condotel in both supply and business results.

During the quarter there was no new supply to the market. Selling rate recorded a slight increase is the product from 2016.

The pace of sales increased slightly in part because the market had no new supply. Consequently, customers have fewer choices. In the next two quarters, this segment is expected to have about 160 luxury apartments offered.

“Investing in tourism real estate is the most prominent trend in the market today. It can be combined as a vacation home for a certain period of time and can be rented for a profit. The price of a villa or condotel project in the beautiful location in Da Nang, Nha Trang or Phu Quoc is quite high. Even higher investment in the mid-range segment in the two major cities of Hanoi and Ho Chi Minh City should be attractive to investors, “Dung emphasized.

That is not to mention that there are quite a lot of investors put forward the commitment to profit attractive customers. This is an important factor to attract customers if the choice of investment channel is both lucrative and high security.

However, CBRE experts also warned of the massive development of the hotel will make the market exceed demand. This will cause the market to fall into the “excess crisis”

“Currently Da Nang has 14,255 rooms and is expected to be around 32,000 by 2020. There are many types of traditional apartments and condotel apartments. Whether the number of visitors is large enough to use up such large number of rooms or not, “- Ms. Yang Shui Dung stressed.

“Not only that, Da Nang is also under strong competitive pressure from neighboring markets such as Nha Trang or Quang Nam. Therefore, investors should consider carefully and have the main choice. “she said.

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