Despite heavy discounts, condotels are still difficult to sell
According to Dau Tu newspaper , land, townhouses, apartments, industrial parks, etc., the above real estate segments have all recorded an upturn in 2024. However, the market still has a product line that has been "frozen" from year to year. That is condotel.
Mr. Chien Nguyen (a member of the SPE.R market research unit and also a broker) said that in the Da Nang area, both the trading floor and buyers showed indifference to condotel projects. Even when the apartment price has dropped by billions of VND, the number of customers asking to buy is still like "a drop in the ocean".
“In 2021, a condotel project in Hoi An advertised a one-bedroom apartment for VND4 billion. Now, the price has dropped to VND3 billion. However, the project is still having difficulty selling off its inventory. Currently, most investors have had to reduce apartment prices by at least 20%. Some units with financial difficulties have even reduced their prices even further,” said Mr. Chien Nguyen.
According to DKRA, the overall demand of the condotel market is at a very low level. In April 2024, the whole country did not record any new projects opening for sale. The primary transaction volume is therefore just a round zero.
The market still has a product line that has been “frozen” from year to year. That is condotel. Illustration photo from the internet.
“Legal and capital difficulties, along with a decline in investor confidence… have caused the market to remain in a prolonged state of stagnation with no signs of recovery in the short term,” DKRA experts concluded.
From the perspective of international investors, Mr. Mauro Gasparotti, Director of Savills Hotels Asia - Pacific , assessed that the condotel segment in particular and resort real estate in general are facing too many barriers for foreign customers. Especially in the regulations and procedures related to project development.
“Therefore, investors often turn to looking for assets that are already in operation, especially quality hotel and resort projects in the 5-star segment in central cities such as Ho Chi Minh City and Hanoi . However, these properties are often quite scarce in the market, as well as less open to transfer needs,” Mr. Mauro Gasparotti revealed about the investment situation of foreign investors.
What is the solution for the condotel real estate segment?
According to the Inspectorate, regarding the issuance of red books for condotels, in April 2023, Decree No. 10/2023/ND-CP was issued by the Government to remove bottlenecks for businesses. At the time the decree was launched, many people considered this "good news" for the resort real estate market.
However, in a document sent by the Ministry of Natural Resources and Environment to the People's Committees of provinces and centrally-run cities earlier this year, the Ministry frankly stated that many condotel projects, along with tourist villas, office apartments combined with accommodation, commercial services (officetel)... have not yet been granted red books.
According to many economic experts, the condotel market in Vietnam went through a "hot" period in the period of 2016 - 2019. At that time, it was estimated that there were an average of 12,000 products for sale each year. However, "quality is more important than quantity". Many products for sale during this period were busy racing to commit to profits, without careful consideration of overall operating results.
Some other markets in Southeast Asia have also witnessed a period of hot development of condotel products, such as Indonesia with the case of Bali in 2008. This market has now passed the stage of new project explosion and is moving towards a stage of slow but quality development.
Dao Vu (T/h)
Source: https://www.nguoiduatin.vn/phan-khuc-bat-dong-san-hiem-hoi-van-chim-dam-trong-kho-khan-a662852.html
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