Real estate market in Da Nang and surrounding areas receives positive signals

Positive signals in the apartment segment

According to a report by DKRA Real Estate Services Group (DKRA Group), in the third quarter of 2023, the residential real estate market in Da Nang and its surrounding areas received positive signals about supply and demand in the apartment segment. Most of the remaining segments continued to decline from the first two quarters of the year.

Entering the fourth quarter of 2023, with positive moves to remove obstacles in legal procedures for real estate projects, reduce lending interest rates, promote disbursement of public investment capital in the region, etc., it is expected to accelerate the recovery of the market.

*The land market in Da Nang in the third quarter of 2023 is quite gloomy.*

Specifically, in the third quarter of 2023, the land segment in this market recorded 3 projects opening for sale with a supply of about 54 plots, down from the second quarter and the same period. The consumption rate on new supply reached 19% (about 10 plots), only 2% compared to the same period last year. Transactions occurred mainly in the product group with an average price of 10.8 million VND/m2.

The apartment market recorded 5 projects in Da Nang being opened for sale, providing about 406 units to the market, 2.8 times higher than the previous quarter and 4.5 times higher than the same period in 2022. The A and C class apartment segments led the new supply, accounting for 52.5% and 47.5% of the total new supply in the whole market, respectively.

Apartment projects for sale are concentrated in Ngu Hanh Son and Lien Chieu districts (Da Nang City). The overall demand of the whole market recorded a positive recovery, the consumption rate of new supply reached about 57%, equivalent to 232 units, 3.6 times higher than the second quarter, 5.4 times higher than the same period in 2022. Most projects continue to postpone the opening date to complete legal procedures and wait for positive signals from the market at the end of the year.

For the townhouse/villa segment, no new supply was recorded. Many projects continuously postponed their sales implementation due to the general impact of the market as well as unresolved legal bottlenecks. Market demand was low, primary consumption was about 19% compared to the same period, transactions were concentrated in projects with complete legal procedures and developed by large investors.

In the secondary market, the selling price of townhouses/villas continued to trend sideways compared to the previous quarter but decreased by 3% - 6% compared to the beginning of the year. Most of the transactions focused on projects that had handed over houses and completed legal procedures with selling prices ranging from 3 - 5 billion VND/unit.

The resort real estate segment continues to record no new supply for sale in all segments. Most of the current market supply comes from inventory of previously launched projects.

In the resort villa segment, the market has not recorded any new supply for sale in over a year. Overall market demand is low, primary consumption has decreased by approximately 59% compared to the same period, transactions are mainly concentrated in projects that have been handed over and are managed and operated by 4-5 star international units. Primary prices remain high, ranging from 9.1 - 131.1 billion VND/unit.

There were no new transactions in the resort townhouse/shophouse segment. The primary selling price did not fluctuate much compared to the same period, fluctuating at 7.1 - 16.3 billion VND/unit.

The condotel segment also did not record any new supply. The primary price level did not fluctuate much compared to the previous quarter and the same period last year. However, the market recorded some secondary listings with prices 10% - 15% lower than the contract price from groups of customers using financial leverage.

Land supply may increase

In the fourth quarter, based on updated data, DKRA Group forecasts that the supply of land plots may increase slightly, fluctuating around 180 - 220 plots, mainly concentrated in Quang Nam and Da Nang. The Thua Thien Hue area continues to have a shortage of new supply. The primary price level continues to trend sideways compared to previous launches. Incentive policies, discounts, etc. continue to be applied by investors to stimulate market demand.

In the apartment segment, new supply may fluctuate at 300 - 500 units, mainly concentrated in Da Nang. The proportion of class A and luxury apartment supply is expected to increase, mainly distributed in Ngu Hanh Son district.

dat2(1).jpg — *Forecast in the fourth quarter of 2023, the land segment may increase slightly*

New supply and demand for townhouses/villas may increase slightly compared to Q3, fluctuating around 50 - 80 units, mostly coming from the next phase of previously launched projects. Overall demand is unlikely to have a sudden change in the short term and will focus mostly on projects with complete legal procedures.

Source