Although there has been a slight trade in the recent 2 months, but for the market to recover like the previous time, real estate in Da Nang - Quang Nam will need big pushes to clear investment flows.
Da Nang real estate now needs a big push from economic development to raise its value
Investors are stuck in capital
Do Duy Tuan, an investor in Da Nang, shared that at the end of 2018, seeing land prices rising, he and his wife decided to sell their house in Hai Chau district for VND 6.8 billion to invest in some projects in Danang. Accordingly, the couple decided to "down money" a plot of land at Eco Charm project for 3.2 billion and a townhouse at the Sunrie Bay project for more than 3 billion. Tuan intends when the price a little higher, it will "surf" to make a profit.
However, after more than 10 months, the transaction prices of these products not only did not go up as expected, but increasingly deep down made Mr. Tuan very worried. Although he accepted to sell a loss of more than VND 500 million compared to when buying, but so far he still could not "push" to go 2 land plots due to the gloomy market situation.
Ms. Tran Thi Kim Thanh, a customer from Hoi An, Quang Nam is in the same situation. In 2017, Ms. Thanh, after collecting some money from savings and bank loans, decided to invest in two land plots of the 7B expanded urban area project of Bach Dat An Company in Dien Nam New Urban Area, Dien Ngoc, Dien Ban town, Quang Nam province. However, after paying more than 95% of the plot value under the contract, until now after more than 2 years, Ms. Thanh has not been able to receive a certificate of land use right for her 2 land plots due to the project being legal problems. Without a certificate of land use right, Ms. Thanh could not proceed with the construction of houses for resettlement, nor transferred it to recover the capital.
The recent developments of Da Nang and Quang Nam markets make customers hesitant and consider when investing in real estate.
“At the time I ordered the expanded 7B project product, the property price was still very low. In the past 2 years, the price of land in Da Nang - Quang Nam has doubled and tripled compared to the original price. With this amount of money, at the present time, we have no chance to buy land to settle down”, Ms. Thanh said.
According to Ho Cong Tinh, Director of Investment - Foreign Affairs, Dong Phong Real Estate Development Investment Joint Stock Company, the legal fuss of a number of projects in Da Nang, Quang Nam. This has led customers to lose confidence and become more cautious when investing in real estate.
“Investors are not in a hurry to invest yet, but they are still considering the evolutions of the regional market before making an investment decision. There are a number of other customers who are buried in projects that are not legal enough, so the cash flow from there is also blocked. In addition, banks tightening lending to real estate investment has also affected the overall situation of the real estate market in Da Nang and Quang Nam”, Mr. Tinh said.
Need an economic nudge
Assessing the recent developments in the real estate market in Da Nang, Mr. Nguyen Tuan Anh, General Director of Truong Gia Phat Real Estate Services Joint Stock Company, said that the period 2009-2014 was the period The real estate market of the whole country fell into freezing, which was also the time when the country's economy was going through a difficult period due to the general impact of the world economic crisis. Tourism, exports, finance and banking have all suffered losses and have a direct impact on the real estate business. Meanwhile, although the real estate market in Da Nang - Quang Nam level has slowed down, there is still plenty of room for development, and the economy and society in general are showing good growth. However, from 2014 up to now, the market has fluctuated, many areas have risen sharply, and many ghost projects have appeared, making risks present to customers and investors. That is why customers are hesitant in the decision to down money.
“Investment cash flow is stalling, making transactions fall. Meanwhile, Da Nang and Quang Nam now have too few good projects for investors to choose, and they have to compete fiercely with other emerging markets in the region such as Phu Yen, Binh Thuan and Binh. Dinh, Quang Binh... In order to bring the market back to activity, first of all, it is necessary to clear the investment cash flow. This depends on the policies of the authorities in solving the difficulties and legal obstacles for the projects currently in the area”, Mr. Tuan Anh said.
For his part, Mr. Nguyen Duc Quynh, General Secretary of Danang Tourism Association, Deputy General Director of Furama Resort Danang said that the strong development of Danang real estate in the period of 2016 - 2018 has a great influence. from a group of large investors from Hanoi and Ho Chi Minh City. Currently, when Da Nang real estate prices have reached the "ceiling" level, they are no longer attractive to these investors and they have withdrawn from the Da Nang market. Therefore, it will be very difficult for Da Nang market to return to the "sublimation" stage as before.
“Da Nang tourism is currently developing quite well. But this is only one aspect of the growth in real estate. Da Nang now needs a real push on economic growth to rise beyond the current common ground, build a good investment environment, rise to become a major center for tourism, finance and trade or education... of the region, like Singapore or Hong Kong... At that time, Da Nang could attract rich people and people with money to live and work. By doing so, the value of Danang real estate will increase and no longer depend on a group of investors. That is the way to open a truly sustainable investment cash flow for Danang real estate”, Mr. Quynh said.
According to Ngoc Tan