Resort real estate is still a remarkable investment channel

This remarks was made by Duong Duc Hien, Director of the Hanoi Housing Savills Business Unit, on the sidelines of a press conference announcing the Hanoi real estate market in the second quarter of 2019.


How do you comment on price movements of the high-end real estate segment in the first half of 2019?


Mr. Duong Duc Hien: In the first six months of this year, the market welcomed many "big projects", high-class luxury projects which were launched with relatively high prices. The market is now in shock of price, but I think that before we look at super-luxury and super expensive projects, let's look at the land value of the townhouses in the same area, the same street.


Currently, the land fund in the central districts of Ho Chi Minh City or Hanoi is scarce. Investors who want land must buy it privately, but privately buy the money for the land is terribly high. In addition, not to mention the cost of project design, construction, commissioning,... That is a lot of money, leading to the price being multipled. When products hit the market, it can't be cheap.


This is a problem that occurs in many places. High rates are available in all central districts around the world. Therefore, it is an opportunity for us to develop satellite cities around the city in order to reduce the traffic density and infrastructure in the city.


For resort real estate, how do you view the development of this segment recently?


In the past, many investors viewed resort real estate as a second home. However, that concept has gradually changed. The purchase of a second home in the old days was quite luxurious, the coastal villa projects were quite expensive.


Recently, if to choose between buying a beach villa for more than $ 1 million, many investors will return to buy a villa in a big city like Hanoi, Ho Chi Minh City. If I buy that villa to live, the value is the same but a little different in terms of conditions and living environment. And if for business, sometimes coastal villas will be better than villas in certain urban areas.


Mr. Duong Duc Hien, Director of Savills Hanoi Housing Business Division.


Therefore, we have seen the remarkable development of derivative real estate over the past time. Derivative real estate has no bad products, only the supply in the market at any time is too much or too little. Of course, other conditions must also be considered. That is whether the investors are interested in their projects, do they really care, manage and operate to generate revenue and pay commitments to investors or not.


Returning to the resort real estate segment, according to our records, the market is having a quite flexible division of prices. Many condotel projects with reasonable prices, ranging from 700 million to 1 billion/unit have appeared on the market. It is not difficult to realize a problem, if you invest a condotel worth 1 billion VND in a well-developed tourist area, then in the peak season, the achieved rental price can be up to 2 million VND/night.
Thus, in a month, the owner only needs to rent 10 days to earn 20 million VND. While in big cities, the investment rate is many times larger, an apartment costs VND 2-3 billion but the monthly rent is only VND 11-15 million.


Overall, I think resort real estate is a notable investment option in the near future. In addition to the specific calculation, the resort real estate in Vietnam also has the coastline advantage of more than 3,000 km. This resource has not been fully exploited. In addition, tourism is identified by the State as one of the key sectors in economic development. Therefore, over time, the resort market has exploded with derivative resort products such as condotel, hometel, shoptel...


In fact, many secondary investors are "stuck" in the resort real estate market. Many customers also accidentally join in projects that do not make an appointment, even fraud. In your opinion, what should investors pay attention to in this segment?


Tourist real estate is a quite special type. Therefore, investors pouring money into this segment should pay attention to the prestige of the investor. Reputation factors need to be considered in the criteria such as who the investor is, have any experience developing in the market, have the products developed earlier been successful yet... In addition, investors need to focus on the whole unit operating resort products.


Another important thing that all investors must pay attention to is the legality. The legislation here is not only the project law, but also the law of the contract signed between the investor and the operator. The majority of resort investors come from Hanoi and Ho Chi Minh City, while the products are in Da Nang, Nha Trang, Phu Quoc... In essence, if the problem arises, the investor cannot come immediately.


In some projects, after customers buy the product, the management unit will sign a lease contract. Therefore, investors must pay attention to every detail in the contract to ensure what the investor, the management unit commits. That is, the terms given in the contract must be strictly implemented, ensuring the interests of investors.


Thank you Sir!


According to Tâm An