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- Being affected by the tourism industry:
The real
estate market in Vietnam is strongly dependent
on tourism. It can be seen that the tourism
industry is developing quite well. Last year,
the number of tourists to Vietnam grew high.
However, there is no guarantee that this will
continue in the coming years. Tourism is one
of the most vulnerable sectors, can be affected
by the turmoil of economy, politics, society
and military, especially when we are located in
the South China Sea. Moreover, global climate
change is also strongly impacting the resort
projects of Vietnam when most of the projects
are coastal.
- Types of resort real estate is not diversified and
investment is not synchronous:
the real estate of
resort in Vietnam now mainly focused on two
segments are resort villas and condotel. At
present, the market is tending to “suffer from
indigestion of the supply”, so investors need to
diversify more types and business models to suit
the actual market conditions in Vietnam.
What are the reasons of the insufficiency?
- Due to the legal system of real estate business
is not complete.
- Because the real estate market is cyclical, it is
influenced by economic, political, socio-cultural,
policy ... and often lags with supply.
- Due to the lack of synchronous development
of infrastructure as well as lack of strategic
measures, the tourism industry is considered
as potential but incompatible with natural
resources. The competitiveness of Vietnam
tourism is also not as good as both the region’s
and the world’s.
- Capital for the real estate market is lacking.
At present, the financial resources of the majority
of entities participating in Vietnam are limited so
they have to rely on channels to mobilize other
financial resources, mainly based on bank loans.
What is the solutions for this insufficiency?
- About mechanisms and policies: To continue
completing mechanisms and policies on real
estate in general and real estate of resort in
particular. Activities of the real estate market of
resort should be concretized by the Law, such as
the Land Law, Law on Real Estate Trading, The
the first quarter of 2016, according to CBRE’s
statistics, the supply of apartments and villas in
these three provinces is still fairly big and the
condotel’s supply has more advantages than the
villa’s.
What is insufficiency of the real estate market of
resort nowaday ?
- Lack of legal basis:
It can be seen that the legal
framework for resort real estate is very shortage.
The rapid development of the real estate of resort
has made the legal framework for it not catch up
with and almost companies still have to get self-
guided instructions, self-built business model
based on Law on Real Estate Trading as well as
Law on Tourism, Law on Housing, Law on Urban
Planning 2009 and other relevant documents.
- The market has signs of the imbalance between
supply and demand:
After two years of powerful
growth, resort real estate had signs of cooling
down because abundant supply leads to the
strong competition. The reason is that there
are still many investors imitating the market’s
tendency. They forgot the main feature of
this segment is always associated with the
convenience in which the project’s location is
very important. This led to the fact that some
projects are expensive and attractive, but some
others aren’t. Up to the second quarter of 2017,
the primary supply had nearly 1,068 villas and
5,062 condotel apartments in stock. However,
the consumption of these two types of resort is
fairly small, only 32.7% and 2.6% respectively.
Thereby, it can be seen that there is a lot of
primary inventory.
FIGURE 02: THE SUPPLY OF APARTMENTS, VILLAS
IN NHA TRANG, DA NANG, PHU QUOC UNTIL THE FIRST
QUARTER OF 2016
Source: CBRE
