Resort real estate is changing phase 2, towards mid-end segment

Savills recently released its report "The 2nd home - global buying and renting trends" in 2018. Interestingly, resort real estate is trending to be popularized.

 

Resort real estate is considered as a second home investment trend. Photo: Shutterstock.

Investment rate reduced

Savills conducted a survey of over 4,300 second home owners on HomeAway in seven major markets: the US, UK, France, Spain, Italy, Netherlands, and Portugal, and noted development trends of lower priced apartments on the second home market.

In 2017, 37% of transactions were real estate under $ 200,000. In 2018, the average selling price of a real estate was US $ 291,000, but it was still 37% lower than a decade ago. This is explained by the expansion of the condominium market: apartments accounted for 34% of the number of transactions in 2017 according to the survey sample, higher than the figure of 26% in 2007.

With the fact that Vietnam's real estate market is increasingly integrated, with a large opening, the evolution of the resort segment has also recorded similarities.

According to Savills, in the past, when the Vietnamese real estate market was just beginning to develop, it was the period of prime central projects, with limited land and limited supply, creating luxury products with high cost.

At this time, the main product type of this market is considered core products such as resort villas and coastal villas. Buyers are mainly investors with large financial potential with long-term investment objectives.

However, recently, with the development of Vietnam's tourism, the demand for accommodation services of mid-range customers has been increasing.

In 2018, Vietnam welcomed 15.5 million international tourists and about 80 million domestic tourists, up 19.9% ​​and 6.8% over the same period last year. Most of these travelers only have an average budget for their vacation and look for affordable accommodation products.

To meet this demand, investors also aim to invest and develop smaller area products and new products at more reasonable prices.

 

SolBeach House, a product of MIK Group in Phu Quoc.

Currently, the resort real estate market has appeared products such as serviced apartments, sea apartments, condotels - considered as a derivative from the traditional core model.

With a moderate area, the investment cost of the properties not attached to this land is not too large and suitable for a larger set of investors.

Emerging market potential

Besides the well-developed resort markets such as Da Nang, Nha Trang and Phu Quoc, investors are also gradually targeting new localities such as Ninh Thuan, Tuy Hoa, Quy Nhon... with demand sources. Significant calendars at pristine destinations and not yet too commercialized. Therefore, the resort market has quickly followed.

In addition, lower land costs in these emerging markets have also opened up investment opportunities for more investors.

The developers of resort projects are also offering flexible investment programs to attract customers, such as sub-leasing programs (commitment or profit sharing), long-term leases or sales and pledge to repurchase real estate.

Relative to the second home real estate investment products in Hanoi and Ho Chi Minh City, this is an attractive investment plan with not too large investment costs and positive profits. This is why the resort market attracts a large number of customers from two big cities of Vietnam.

Not only attracting domestic investors, the Vietnamese resort market has a big attraction for foreign investors. The interest of foreign visitors to buy a second home in Vietnam has been recognized for many years because of the potential resort market and competitive housing real estate prices compared to developed countries.

Since the Housing Law amended in 2015 allows foreign individuals and organizations to own real estate in Vietnam, the number of foreigners who are interested in and buying second homes in Vietnam has increased significantly. A number of projects in Hanoi, Ho Chi Minh and Da Nang, after being launched, quickly reached the maximum percentage of foreign buyers.

According to Thanh Nguyen