The Central region has a lot of room and great potential for real estate development, especially resort real estate. Focusing on exploiting the potentials of tourism and investing in infrastructure will help the Central real estate market to grow stronger in the future. Mr. Duong Duc Hien, Director of Housing Business in North and Central of Savills Vietnam, assessed this market.
Could you share some general assessments about current investment trends in real estate in Central Vietnam?
In my opinion, in the short and medium term, ie from the next 2 to 5 years, Vietnam will still focus on strong tourism development, especially in provinces and cities in the South Central. This is also an opportunity for the real estate market in this area to develop.
Currently, capital flows continue pouring into the Central market, especially for the resort real estate segment. However, the Central market still has a lot of potential and room, as well as a lot of projects are in the process of construction and completion before launching.
In your opinion, what is the difference of the central real estate market compared to other markets? In the future, which market should this be to develop sustainably?
With the real estate market in Vietnam, besides Hanoi and Ho Chi Minh City can be considered as two mature markets in Vietnam, all the remaining markets are emerging markets, seeking directions and finding ways to shape her personality, depending on the region and the time.
For the Central region, the current population size cannot be compared with the two big cities, so it is not a suitable market for strong development of urban areas or land projects. On the other hand, the Central region is an extremely favorable place to develop resort real estate due to natural factors such as the sea, mountains and rivers.
Therefore, the Central region is also the leader in the trend of the resort real estate market to move from high-class luxury products just for customers with small capital. With the development of tourism becoming the spearhead of Vietnam's economy, I think that resort real estate still has opportunities to continue developing in the Central region.
The geographical and natural conditions bestowed on the Central region are not inferior to the famous resort markets in the world such as Thailand or Bali. The Central region has absolutely the opportunity and conditions to develop as these destinations, attract tourists and bring greater revenue. The potential of the market is evidenced by the level of interest of investors as well as of international investment funds. This is a positive signal and a sustainable development direction of the market when foreign capital flows will be a good balance for financial problems in real estate development.
In parallel with the development of projects, localities should also pay attention and pay more attention to the development of infrastructure, social security, roads and bridges, airports, train stations, bus stations. These factors are conditions for the real estate market in general, not only resort real estate, to develop sustainably in the long term.
As an expert, do you have any suggestions for the central resort real estate to compete with traditional resort real estate markets of Asia such as Bali, Phuket...?
One of the advantages of the countries that have gone ahead is the standards and regulations on the segment, on the classification of star types applied to the types of hotels and resorts very clearly and transparently. Moreover, these countries have many incentive policies to attract different tourists, besides visiting or shopping tourism, as a spiritual experience or retirement travel. Since then, real estate products have been invested and developed more diversely.
In addition, these countries also have a lot of preferential policies to attract individual foreign retail investors for second home products. This is one of the very good ways to attract foreign capital from localities for tourism development. In addition, airport infrastructure systems, train stations and public transport are also developed with very good quality and service. Tourists coming to these localities also enjoy policies to protect their rights and avoid fraud and price cutting.
These factors all make a bigger and stronger tourism attraction for Vietnam's tourism destinations and a greater potential for the resort real estate market. These are all factors that we need to care about and can learn to apply to Vietnam.
Central real estate market is shifting the heat from the old markets such as Da Nang, Nha Trang to spread to nearby localities such as Quang Ngai, Phu Yen, Quang Binh... What is the cause of this trend?
The advantage of Vietnam is that it has a long and nearly continuous coastline between the central and southern central provinces. The distance between provinces is not too far. Therefore, tourists can conveniently move from one tourist destination to another. The two previous resort markets, Da Nang and Nha Trang, have a pioneering advantage thanks to the good connectivity infrastructure such as the international airport, accompanied by the development of tourism services. In the context that the attraction of tourism is gradually spreading to other localities in the Central and South Central region, the resort real estate market continues to be natural.
Not to mention, we are just focusing on exploiting the sea tourism section, so most of the resort markets are concentrated around the beaches that attract the most tourists. If we expand into mountain tourism, jungle adventure tourism, Ho Chi Minh trail tourism, there will certainly be more localities benefiting and attracting resort real estate investment.
With favorable weather and sunshine all year round, the Central and South Central regions attract domestic and foreign tourists for almost 12 months. This is a favorable condition for the business of resort tourism services, creating a stable revenue for the projects.
What will the competition of emerging markets create for the central real estate market, sir?
In terms of planning, each province and each city has its own characteristics, not every place has a big city and a good location like Da Nang or Nha Trang. There are many emerging tourist cities, but the scale of urban is smaller, the beach is also smaller than Da Nang or Nha Trang. Therefore, it is also the balance and harmony of the markets.
In addition to customers who want to look for famous landmarks, there are still many customers who want to have adventure trips or travel in quieter places, closer to nature, avoid the place. Tourist destinations are too commercialized. Therefore, there will be no competition between the old and new markets, but it will be a picture of synchronous and harmonious development between localities.
According to Tan Phuong