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VARs: A gloomy outlook for resort real estate in 2024

VARs: A gloomy outlook for resort real estate in 2024

Tuesday 16, 01 2024
The Vietnam Association of Realtors (VARs) predicts that resort real estate will continue to face prolonged difficulties and cannot recover soon.

The quietest segment

Although there has been an opportunity for "rebirth" thanks to Decree 10/2023/CP-ND, resort real estate is still the quietest segment of the real estate market. Up to now, this real estate segment has still been in a "long slide" and has not been able to prosper.

According to data from the VARs, in 2023, there were about 3,165 new tourism and resort real estate products, down more than 80% compared to 2022. Many projects were continuously postponed, or rescheduled sales due to unfavorable market context.

The quietest segment

Not only supply but market transactions also continued to be gloomy. The entire market only recorded 726 tourism and resort real estate products successfully traded in 2023.

Explaining the cause of this situation, Ms. Pham Thi Mien, Deputy Head of VARS Market Research and Investment Promotion Consulting Department, said that there are still many difficulties facing the resort real estate due to many factors such as legality, administrative procedures and capital clearance.

A series of large projects are facing legal problems so they cannot be released. Besides, resort real estate prices remain high, with no downward trend. Inventories in the market are mainly high-end products, which must compete directly with loss-making products from previous investors.

Meanwhile, customer confidence has not returned. Most investors are still choosing to turn away from the resort real estate segment due to legal concerns and the ability to make business profits in the context of the tourism industry still having many challenges.

Many solutions to retain and attract tourists have been applied. However, these stimulus measures need time to "absorb" the policy, along with the coordination of local authorities and industries to boost demand.

Future forecast

According to data from the General Statistics Office, for the whole year 2023, Vietnamese welcomed 12.6 million international visitors. This figure is 3.4 times higher than in 2022, but still much lower than the pre-Covid-19 pandemic level.

Future forecast

Meanwhile, the resort real estate segment is closely related to the tourism market. The close connection between these two areas brings great potential for resort real estate when taking advantage of the growth in tourism demand including domestic and international visitors.

Ms. Mien forecasts that in 2024 the resort real estate market will continue to face great difficulties and challenges. The freezing trend will continue, and neither supply nor liquidity will be able to recover.

Regarding supply, there are possibilities that supply will be improved but it is not too certain. Total market supply is expected to only increase by about 20% compared to 2023.

In particular, the beach apartment segment will be the highlight of tourism and resort real estate in 2024 because it not only meets the needs of ownership, has a long-term red book, but can also be exploited for rent and create a cash flow.

Supply will mainly come from the tourist apartment segment in large-scale projects, expected to account for at least 60% of the market share.

In that context, investment demand will recover but at a slow pace. Transactions continue to be quiet and are still far away from before the Covid-19 epidemic. The VARs predicts that the number of resort real estate transactions will only increase by about 30% compared to 2023.

Source: VARs, theleader

Compiled by Vietnamcredit

 

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