According to Duong Duc Hien, North & Central Housing Sales Director of Savills Vietnam, in the previous time when the Vietnam real estate market was just beginning to develop, it was the period of projects with prime locations, with limited land bank and supply, creating luxury products with high costs. The main types of products of the market at that time were considered core products such as resort villas and coastal villas. Buyers at this time were mainly investors with large financial potential and long-term investment objectives.
However, recently, with the development of tourism in Vietnam, the demand for accommodation services of mid-range customers is growing. In 2018, Vietnam welcomed 15.5 million international tourists and about 80 million domestic tourists, up 19.9% and 6.8% over the same period last year. Most of these travelers only have an average budget for their vacation and look for affordable accommodation products. Meeting this demand, investors also aim to invest and develop.
The resort real estate market started having products such as serviced apartments, marine condominiums, and coastal hotel apartments - considered as a derivative of the traditional core model. With a moderate area, the investment costs of these non-land based real estate are not too large and suitable for a larger set of investors.
"Besides well-developed resort markets such as Da Nang, Nha Trang, and Phu Quoc, investors are also gradually targeting new locations such as Ninh Thuan, Tuy Hoa, Quy Nhon, Binh Thuan, etc. There is a significant source of tourism demand in pristine destinations and is not yet commercialized; The resort market has thus followed suit. Land costs in these emerging markets are lower, opening up investment opportunities for more investors, "Hien said.
Sharing the same view with Hien, Nguyen Van Dinh - Vice Chairman of Vietnam Real Estate Brokers Association also said that currently, the resort real estate products are closer to the demand of investors. Currently, with only a few hundred million, customers can buy a beach apartment just for business while serving the family's travel needs.
From an enterprise perspective, Nguyen Quang Huy - Deputy General Director of Apec Group shared that a few years ago, the condotel segment was growing very hot but only met the needs of a small group of high-class investors as the value of apartments was up to 3-4 billion. But currently, condotel apartments are entering the niche market but serving the needs of the majority of customers.
"Condotel apartments are currently priced from VND 500 million to VND 1 billion, serving a large number of customers in the lower class, from office workers to those with a few hundred millions of idle money. With less investment plus flexible payment policy of up to 36 months, everyday customers only need to spend a few hundred thousand to buy a condotel apartment, "Mr. Huy emphasized.
Mr. Huy also said that, for example, the hotel apartments at the project Apec Mandala Wyndham Mui Ne have an investment of 800 million while it is divided into 32 payment terms so the amount that customers need to pay each term is only 20 million/term/apartment. In line with the trend of relaxation, Apec Group developed a product line of small hotel apartments, with the profitability equivalent to larger areas and a smaller investment.
"With this product line, Apec Group creates a new investment trend for those who do not have much capital or young people who want to participate in the real estate investment market. Owning a second or third house ... is getting easier and more realistic for many people, "Huy added.
Practical observation shows that, at present, there is a tendency of investors targeting customers who have small savings, encouraging them to use that money to buy a coastal apartment and installments instead of depositing for an interest rate of 5-6%.
The developers of resort projects are also offering flexible investment programs to attract customers, such as sub-leasing programs (commitment or profit-sharing), long-term leases or sales, and commitment to real estate acquisition.
Correlating with the second home real estate investment products in Hanoi & Ho Chi Minh City, this is an attractive investment plan with not too big investment cost and positive profit. This is why the resort market attracts a large number of customers from the two big cities of Vietnam.
Not only attracting domestic investors, but the Vietnamese resort market also has a big attraction for foreign investors. The interest of foreign buyers in the second home sector in Vietnam has been recognized for many years because of the potential resort market and competitive real estate prices compared to developed countries.
Since the amended Housing Law 2015 allows foreign individuals & organizations to own real estate in Vietnam, the number of foreigners interested in and buying second homes in Vietnam has increased significantly. A number of projects in Hanoi, Ho Chi Minh and Da Nang, after being launched, quickly reached the maximum percentage of foreign buyers.