Week 10/2023 – Central Vietnam Real Estate News Summary
In this weekly or sometimes bi-weekly news flash – CVR: Central Vietnam Realty will provide a choice of articles from mainly Vietnamese media sources related to the real estate market in Vietnam.
We will be focusing on issues related to Da Nang and Hoi An, while also looking at national news and their possible impact on Central Vietnam’s property market.
You will find a summary, a link to the source as well as CVR’s take on the article.
We believe that local knowledge is the key to making the best possible decision and that’s what we offer to all our clients.
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1. Why do the rich still prefer to buy shophouses, despite spending billions to earn only millions in rent while investors can earn 200 million per month by saving the same amount?
The article discusses a real estate investor who spent 30 billion VND (about 1.3 million USD) to buy some shophouses for rent, but only earns a few million VND per month if deposited in a savings account. The article asks why wealthy people still choose to invest in shophouses.
Shophouses are a type of commercial real estate combined with apartments, designed as a shop on the ground floor and apartments on the upper floors. The advantage of shophouses is their convenient location in urban areas, near shopping centers, with good transportation and many other amenities.
Although renting out shophouses only brings relatively low income compared to the initial investment, wealthy people still choose to invest in them because they are considered a safe and stable investment that provides steady long-term profits.
Moreover, shophouses are seen as a medium-level and more accessible form of real estate investment compared to luxury apartments, villas, or high-end urban areas.
The conclusion that can be drawn from this article is that although investing in shophouses may not yield high returns in the short term, it is still considered a safe and stable long-term investment for wealthy individuals. The strategic location and convenience of shophouses make them an attractive investment option. Additionally, shophouses are perceived as a more accessible form of real estate investment compared to luxury apartments or high-end urban areas. Despite the low income generated by renting out shophouses, wealthy investors continue to invest in them due to their stability and potential for long-term profits.
2. Apartment in Da Nang is out of time to ‘scream’ high prices, transactions are frozen – Vietnamnet.vn
The article discusses the current state of the real estate market in Da Nang, Vietnam, specifically regarding apartment buildings. The author notes that the market has cooled off in recent months, with supply exceeding demand and prices decreasing.
According to industry experts, there are several reasons for this trend. One is that many developers rushed to build apartment buildings in Da Nang in recent years, leading to an oversupply of units. Additionally, the COVID-19 pandemic has decreased demand for real estate in general, as many people have been hit hard financially and are not looking to purchase a property.
The article notes that some apartment buildings in Da Nang are now selling units at prices below their initial asking price and that it may be a good time for buyers to take advantage of the lower prices. However, the author also cautions that buyers should still do their due diligence and carefully research any potential purchase, as some buildings may have hidden issues or be in less desirable locations.
Overall, the article paints a picture of a real estate market in Da Nang that is currently favoring buyers rather than sellers, with prices decreasing and an oversupply of units.
At CVR we notice that while the apartments for sale in Da Nang available to foreign buyers are more resilient and we have not seen sales at a loss, more and more sellers are willing to consider offers with considerable discounts to the listing price. We do agree the current market favors buyers and we encourage clients to make offers at levels comfortable to them as they may well end up accepted by the sellers without a lot of negotiations.
Contact us today for the most up-to-date list of the best opportunities amongst apartments for sale in Da Nang!
3. Da Nang Tourism Department Reports Strong Revenue Growth in 2023 Despite Ongoing Challenges – Baodanang.vn
The Da Nang Tourism Department has released a report on the revenue generated by the tourism industry in the city for the first two months of 2023. The report indicates that the revenue from the accommodation, meals, and travel has increased by more than 1.7 times compared to the same period in 2022. The number of guests served by accommodation establishments has also increased significantly, with a total of 742.5 thousand arrivals, an increase of 4.7 times over the same period in 2022. International visitors to Da Nang have also increased significantly, accounting for nearly 11% of international visitors to Vietnam.
However, the report also highlights some limitations and challenges that the Da Nang tourism industry is facing, such as difficulties in terms of tourists, business capital, reinvestment, human resource recruitment, and degraded facilities. The city leaders have proposed various solutions to overcome these challenges, including investing in infrastructure projects, developing specific and high-quality tourism products, and creating new tourism products. The report also notes that Da Nang will host many large-scale festivals and events in 2023, which is expected to attract more tourists and promote the image of Da Nang.
Based on the article, the strong growth in tourism in Da Nang is likely to have a positive impact on the local real estate market. The increase in the number of guests served by accommodation establishments, as well as the significant increase in international visitors, could lead to higher demand for rental properties, especially in areas close to tourist attractions. This could also lead to an increase in the number of property purchases by investors looking to capitalize on the growing tourism industry.
Additionally, the hosting of large-scale festivals and events in 2023 is expected to attract more tourists to Da Nang, which could further boost the real estate market in the city. Overall, the strong growth in tourism in Da Nang is likely to have a positive impact on the local real estate market, with increased demand for rental and purchase properties and the potential for long-term growth.
4. Hotel demand increases, resort real estate getting great opportunities – Thanhnien.vn
Colliers – a global real estate management group – has just released an update on tourism trends in the first quarter of 2023 with the assessment that resort tourism in Vietnam is very positive and that makes the real estate market get full of potential.
In Vietnam, resort real estate shows great potential as the country is taking advantage of the growth momentum of post-pandemic tourism and resort demand from domestic and international arrivals.
For example, KKR raised $4.3 billion in the midst of the Covid epidemic. Bain has also acquired hotels individually or collectively, with or without the brand. Warburg Pincus continues to invest in Vietnam through its Lodgis platform…
The tourism industry will continue to recover in 2023, and hotel demand across the region will continue to increase. The drop in demand from the West at the start of the year, if any, will be offset when Chinese tourists return in the second half of the year. In markets that are open and in a supply-demand balance, revenue per available room is expected to grow by about 6% y/y thanks to improved occupancy
5. The warehouse rental sector is currently ‘rescuing’ investors? – Cafef.vn
The article discusses the current situation of warehouse rental services in Vietnam, where the demand for rental space has increased rapidly due to the growth of e-commerce and the expansion of manufacturing activities. This has led to a shortage of available warehouse space and an increase in rental prices.
The article highlights the potential benefits of investing in warehouse rental services in Vietnam, as well as the challenges that investors may face, such as land acquisition difficulties and the need for modern facilities to meet the evolving needs of customers.
Despite these challenges, the article suggests that warehouse rental services remain a promising investment opportunity in Vietnam, with significant growth potential in the future.
Why is this important: the article provides useful insights for potential investors to consider before making investment decisions.
6. Over 2,000 international cruise ship passengers arrive in Da Nang – Danangtoday.com
The article reports that over 2,000 international cruise ship passengers arrived in Da Nang, Vietnam, on March 6th, 2023, as part of a six-day tour of Southeast Asia.
The passengers were from the cruise ship Voyager of the Seas, which had departed from Singapore and visited other destinations before arriving in Da Nang. The passengers were greeted by local officials and given a tour of the city’s popular attractions.
Why it is important: The article notes that the arrival of international cruise ship passengers is a positive sign for the tourism industry in Da Nang, which has been heavily impacted by the COVID-19 pandemic.
7. The real estate market is very different, will the land price increase again at the end of the year? – Cafef.vn
Land plots in many areas have decreased in selling price, even up to billions of dong.
In the context of a quiet real estate market, prices and liquidity also declined, especially in the land plot segment. However, the land is still considered to have good investment potential.
However, it will not be until the second quarter of 2023 that the real estate market can recover transactions. This is the period when investors are exploring, not putting money down when the information on interest rates and credit has not improved.
The real estate market is in an unpredictable state, despite having bright spots. 2023 is a year of many challenges, it may take from 2024 onwards for the real estate market in general and land plots in particular to recover.
Normally, in a year, there will be a land fever at the beginning and end of the year. Similarly, in 2023, the land fever will return but occur at a later time, maybe in the second – third quarter or at the end of the year, there will be more land searches. Because then, the difficulties were removed, the market recovered, interest rates decreased, and capital mobilization channels were opened.
Why it is important: The recovery of the land market creates more bright spots for the real estate market, the transaction becomes more active and the number of customers wishing to buy in or invest will be more abundant.
As always, CVR is at your service and happy to provide help anyways we can!
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