Danang and Central Vietnam Real Estate Market – Summary of year 2021 and outlook for year 2022.
As we are entering the new year 2022, its a good moment to look at what happened in 2021 and identify trends which may shape the future. In an article from December last year, based on resilience of the Vietnamese economy and we forecasted a continued real estate market recovery with new supply in both residential apartments and holiday property segments.
While the real estate market element of the prediction has proven mainly correct with new projects such as the Hoiana Shores Golf Villas, Le Meridien Danang Residences, The Filmore Danang Apartments have opened sales or early bookings in the last quarter of the year, the overall economic performance and return of tourism have been slower than expected.
Vietnam Economic Landscape in 2021
After entering 2021 with energy closing Q2 with over 6% growth in GDP, Vietnam’s economy was hit hard by the 4th wave of the pandemic resulting in the first in many years negative GDP growth in the third quarter. Strict lockdowns have impacted peoples lives as well as business operations across most industries.
Well executed measures policies of the government quickly brought the basic vaccination rate in Vietnam to over 70% – higher than most of the neighboring countries, which enabled steady reopening of the economy.
Considering the difficulties, the 2,58% growth in the gross domestic product for 2021 can be considered a success. At the same time the total trade revenue rose by 22.4 percent to over 660 billion USD, turning Vietnam into one of the 20 leading economies in terms of international trade. The trade surplus in 2021 has reached nearly 3 billion USD and the attracted foreign direct investment was higher than 29 billion USD, up by over 0.5 billion USD from 2020.
Danang and Central Vietnam Economic Performance in 2021
Following the pattern of the country as a whole, in the first 6 months of 2021 Danang City’s economy showed positive signs of recovery getting rid of the negative growth rate of 2020, with an increase of 5.09% over the same period in 2020. However, the 4th wave of epidemic returned to Vietnam and Da Nang causing serious slow down of the economy in the third quarter due strict distancing policies of the government. This has obviously meant delays to opening of the hospitality segment.
Recovery has been noted in the last 3 months of the year with overall positive GDP growth for the city in 2021.
Tourism segment is also expected to start opening up with recently announced re-openings of international flights to Vietnam.
Danang Real Estate Market going into 2022
Overall, the real estate market in Danang has been improving in 2021 with prices staying stable across all segments. Concurrent with the 4th wave and lockdowns we have seen the number of real estate transactions drop sharply, yet they started to quickly recover in Q4/2021 and even more so in the first weeks of 2022 leading to TET Holiday.
Market confidence is up with land prices starting to climb up again as the year progresses and economy benefits from further liberalization of the pandemic related restrictions.
The growing demand is also reflected by the few new apartment, villa and townhouse projects opening sales or bookings. Namely, we have seen soft openings of sales and bookings for Hoiana Shores Golf Villas, the Le Meridien Danang Residences and in the apartment category, the Asiana Danang and the Filmore Danang as well as few smaller more local real estate projects. We expect to see more new supply and higher absorption rates as the year progresses and more visitors are able to enjoy the natural beauty of Danang.
If you are waiting to find the best deal on a beach villa in central Vietnam – this little guide on All Newest Beach Villas For Sale in Danang & Hoi An – 2022 could be useful!
Danang Property Rental Market in 2022
The residential rental market in Da Nang is recovering slowly with high discounts still available. Clients looking for houses and villas for rent in Danang have plenty to choose from and landlords continue to be more flexible on lease terms. This is most visible in the higher-end and luxury segments where ocean view apartments such as this 2 bedroom in the Ocean Suites Danang is offered at ~US$800/month or this 3 Bedroom Golf Villa with private swimming pool at ~US$1000/month – roughly 50% off compared to “pre-Covid” prices.
Commercial property rental market in Da Nang is still feeling the lack of tourists and foreign visitors with quite high vacancy rates. With that said, best locations and best deals are getting snapped at major discounts for the initial lease periods and landlords of storefronts are more open to clauses beneficial to tenants in case of new restrictions on operating the business.
Segment of offices for lease in Danang is also offering quite a wide choice for prospective tenants. Professional office space for lease in Danang comes at as low as ~US$10 per square meter in modern office towers such as Truc Thang Building right on Nguyen Van Linh in the city center.
What will year 2022 bring for Danang and Hoi An Real Estate Market?
We remain cautiously optimistic and look forward with confidence. Return of tourists is an important factor for Danang, Hoi An and Central VIetnam’s economy in general and holiday property segment in particular.
With recent news on high chances for complete opening of Vietnam’s tourism market in May 2022, we believe that the coastal real estate including beach villas and apartments for sale in Da Nang will start warming up in H1/2022 to return to a strong growth pattern in the third and fourth quarters.
More progress on existing projects as well as launch of sales of new condo and beach villa properties is what we expect 2022 is going to bring to Central Vietnam.
After all, Central Vietnam and in particular areas of Da Nang and Hoi An have all the fundamentals for the real estate market to thrive once we are out of the turbulent waters!