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Condotels growing in popularity

Released at: 15:48, 03/06/2016

Condotels growing in popularity

Photo: Viet Tuan

CBRE report notes handsome growth in condotel market in Da Nang.

by Thu Hoang

The condotel market in the first five months of 2016 showed a strong increase in new supply, according to a CBRE report released on June 2.

There were 2,436 units from six projects launched in the market in the first six months, 89 per cent of which were in the high-end sector, such as Vinpearl Riverfront Condotel Da Nang, Ariyana Beach Resort & Suite Da Nang, Alphanam Luxury Apartments, Ocean Suite (Block B), FHome (Block A), and Cocobay Ocean Condotel.

The total supply from condotel projects increased to 3,084 units, of which high-end developments accounted for the largest proportion, of 76 per cent, followed by the mid-end (16 per cent) and the luxury segment (9 per cent).

Two more projects are expected to come online early in the third quarter: Tourane Condotel and Condotel Central Coast Da Nang, adding more than 800 units to the market, according to the report.

New supply caused the average asking price in high-end projects to fall by 4.8 per cent while mid-end projects increased slightly, by 0.4 per cent, compared to the fourth quarter of 2015, while prices in luxury projects remained unchanged. Developers offered small discounts to early buyers at new launches, of 3 to 5 per cent.

In terms of sales activities, as at the end of May projects that were launched at the beginning of the year recorded an average sales rate of 63 per cent while those that were launched in April still have a low sales rate.

Buyers from Hanoi and northern cities dominate the second home market in Da Nang, accounting for 75 to 85 per cent of successful transactions and most request access to a rental pool program.

“In terms of future launches, 1,629 units from six projects are expected to be launched in the next six months, most of which are in the mid-end segment,” the report stated.

Second home villas saw no new supply enter the market in the review period, staying at 788 units from 14 projects. Sixteen villas will enter the market from the second phase of the Nam An Residence project early in the third quarter.

In the first quarter of this year average sales in the luxury and high-end segment rose 5.9 percentage points and 9.4 percentage points, respectively, compared to the fourth quarter of last year.

Several successful transactions helped to increase the mid-end segment’s sales rate by 1.2 percentage points quarter-on-quarter.

Successful transactions were primarily in projects such as Furama Pool Villas, Premier Village Da Nang, Naman Residence, The Point, and Vinpearl Resort & Villas Da Nang 2, the CBRE report noted.

Projects with a program guaranteeing rental yields are more attractive to potential buyers, according to Mr. Marc Townsend, Managing Director of CBRE Vietnam.

Overall, both the condotel and second home markets saw lively movement in sales activity in 2015 and the first five months of 2016, especially in increasing sales rates at launched projects. “Vacation projects managed by well-known operators and offering fixed annual returns are proving attractive to investment buyers,” Mr. Townsend said.

Average asking prices remained unchanged in the review period and are expected to remain stable in most projects over the next quarter.

Developers will continue offering incentives to encourage prompt payment. Asking prices for second home villas in Da Nang range from $250,000 to $2 million, of which the largest proportion, 57 per cent, is from $500,000 to $900,000.

This was followed by units in the $900,000 to $1 million price range (23 per cent) and those in the $1.5 million and above price range (14 per cent).

With rapidly improving infrastructure, Da Nang is to become the business and commercial center of central Vietnam and an events city in Vietnam.

  • TAGS
  • condotel market
  • CBRE
  • second home
  • Da Nang

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