Vietnam’s Resort Real Estate to Explode in the near Future

At a recent real estate discussion held by Dan Tri newspaper, many investors wondered what factors should need to be considered for investing in resort real estate in the current period? And how to know if this particular market has the ability to recover soon?

According to the Senior Director of Savills Vietnam, each investor has its own criteria. With tourism real estate there is an important criterion that we need to consider and that’s its legality. Currently, the law does not allow condotel ownership. Accordingly, investors must clearly determine whether they have the right to own property on land for 50 years (with pink book) or just a contract of capital contribution or land lease with a definite term with the investor. 

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Regarding the location, investors should buy in an area where you can visit every 2-3 weeks to relax, besides handing it back to the operating unit for exploitation and rental. Along with that, there is the issue of profits from condotels or bungalows. With bungalows or condotels, people invest not for profit but for lifestyle. Therefore, investors cannot claim profits in resort real estate the same way they do for standard residential real estate.

According to the Chairman of the Vietnam Tourism Real Estate Association, when talking about resort real estate, we often talk about beach resort real estate. But in the world, collectively called green tourism, that is, real estate associated with the ocean, rivers, lakes, streams or mountains as in the Northwest Highlands.

With the goal of striving to reach 35 million international visitors and more than 120 million domestic visitors, accommodation establishments serving tourism must be twice as many as they are now. That means that a huge investment in resort real estate is required to meet the tourism demand. In particular, the segment with a good market share is the high-end resort real estate, combined with culinary culture and digital transformation to bring information to domestic and international tourists. Thereby, prolonging the stay of tourists and increasing the rate of visitors return.

If we can extend the stay of tourists from 3-4 days to 8-10 days, then the infrastructure needs will not only need to double its capacity, but increase 3-4 times.

After living with Covid-19, we started to stimulate economic demand, open the market, stimulate tourism demand… Of course, the more money in the market, the more real estate will increase in price.

According to experts, in real estate, the segment that will explode in the near future is resort real estate, especially the beach resort real estate. We say Vietnam has 3,200 km of coastline, but actually resort products are limited. If we can’t make a coastal road to effectively exploit 3,200 km of coastline, but cut into sections according to each locality, the land fund for resort real estate will be limited. Vietnam can implement socialization of investment, bidding to implement the coastal road and surrounding land funds. And experts believe the demand in the near future would be very large.

According to experts, currently each investor has a separate policy to promote customers to buy resort real estate. These are all financial problems, instead of borrowing from banks, they sell, rent back and pay interest to buyers 10-15%/year. 

Now they give the problem, customers just buy it, after 3-5 years of ineffective exploitation, they buy it back. It’s still a financial problem, instead of paying each year, it’s 3 years. 

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