Resort villas booming

18 May
VNREResort villas have been mushrooming everywhere, from the north to the south with a lot of projects being under construction. This proves to be the new profitable market segment of Vietnam’s real estate market.

While apartments cannot find buyers in the difficult time, when banks tighten their loans to fund real estate investments, resort villas still can catch the attention of investors. This new market segment proves to be the way out for real estate developers, who are facing big difficulties due to the low demand.

Explaining why the demand for resort villas is increasing, Tran Hoang Nam, Investment Director of Archi Group said, on Dat Viet that the villas aim to serve the demand for relaxing the resting of businessmen and investors. “In the context of the economic difficulties, businessmen tend to invite their partners and guests to come to their resort villas to relax instead of coming to restaurants,” Nam said.

According to consultants from CBRE, a real estate service provider, the resort real estate market has been developing with a lot of projects being under construction from the north to the south. These include Zen Resort, Ngoc Vien Island, The Grand Arena, and Flamingo Dai Lai in the provinces of Vinh Phuc, Hoa Binh and Ba Vi. The prices of the products are between 200,000 and 800,000 dollars per product, depending on the positions and area of the villas.

Ngo Thi Huong Giang from CBRE said that the resort villas worth several million dollars prove to be the best sellers, thanks to the advantageous positions and good material facilities. Besides, they can be seen as attractive tourism destinations.

Furama project, for example, with seven bloc of villas close to the coastal areas priced at 2 million dollars for each, is now very attractive to buyers. Meanwhile, other villas have been selling more slowly despite the lower prices of 500-600,000 dollars.

In April 2011, a lot of resort real estate projects in different cities and provinces were introduced in the market and got high percentage of reservation, even though the products are expensive, and in many cases, clients can have the right for long term use of 50 years, according to VnExpress.

On April 9, Cotecland and CotecAsia opened the sample apartment of Blue Sapphire project in Vung Tau City. Right on the first day when the apartment was shown, 16 clients made reservations. The lowest sale price announced by the project’s developer is 22 million dong per square meter.

Prior to that, in November 2010, Cotecland and CotecAsia announced the first phase of Blue Sapphire project. By the end of the first quarter of 2011, 55 percent of the 130 resort apartments of Bloc A of the project had been reserved.

Investors say they are injecting money into the resort real estate market, because the market can be associated with the tourism and service sectors which can help increase the value of the real estate assets.

However, many real estate investors still hesitate to pour money into the resort real estate sector, because they fear that Vietnamese rich people are not rich enough to make the market segment bustling.

Nguyen Thanh Vu, Deputy Director of Ninh Van Bay Club, said that the resort real estate market is not really bustling in the context of the current economic difficulties.

He said that most of people are trying to tighten their belt. Meanwhile, resort real estate is the sector for high income earners and the “upper class” in the society; therefore, the sector cannot be as popular as other market segments. This explains why many developers of the projects are incurring losses.

Meanwhile, Nam told Dat Viet that the resort real estate market will have a low season ahead. However, he still believes this is an attractive investment channel. The products with the prices of between three and five billion dong will be the choice of many people.

Source: Vietnamnet

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