A corner of Phan Thiet city. (Photo: phanthietvn.com)
Important infrastructure such as Dau Giay-Phan Thiet Highway and Phan Thiet Airport were seeing good progress after lengthy delays, said Savills Vietnam.
The Ministry of Transportation has announced the investment plan for Dau Giay-Phan Thiet Highway, which will begin construction in 2020. This project will shorten driving time from HCM City from four hours to 2.5 hours.
Another important project is the Phan Thiet Airport, which is under final planning stages and is expected to be operational in 2022.
“The Dau Giay-Phan Thiet Highway will further increase visitors from HCM City and will grow the number of northern visitors, who are currently very limited in Binh Thuan,” Troy Griffiths, Deputy Managing Director Savills Vietnam said.
“Holiday home products will be attractive to wealthy HCM City and Hanoi buyers. These potential buyers have shown great interest in holiday home products as they offer a combination of lifestyle and long-term investment.”
The Long Thanh International Airport is in the final planning stage and its first phase is expected to be ready in 2025 with a capacity of 25 million passengers annually. Located 130 km from Binh Thuan, the international airport is expected to service many foreign visitors. This will be a major advantage for province, as foreign visitors tend to spend more than local visitors.
“Both the hospitality and holiday home markets will benefit from the high volume of foreign tourists. While the hotel segment can secure higher rents and occupancy, holiday home projects can expect to boost buyer confidence in term of returns and capital gain,” Griffiths said.
Tran Nguyen Minh Hai, real estate expert of the Banking University in HCM City, was quoted by vneconomy.vn as saying that this year, the three largest resort real estate markets in Vietnam, Da Nang, Nha Trang and Phu Quoc, have levelled off. Therefore, investment would shift from these markets to emerging markets such as Quy Nhon and Phan Thiet.
"Phan Thiet is an ideal place to attract capital from HCM City investors thanks to its geographical advantages," he said.
On the other hand, in the first six months of 2018, investment focused on Vietnam’s three mooted special economic zones, namely Van Don in the northern province of Quang Ninh, Bac Van Phong in the central province of Khanh Hoa and Phu Quoc Island in the southern province of Kien Giang. However, Vietnam does not have yet a law for special zones so the investors in the zones have moved their investment to markets like Phan Thiet, according to Hai.
At present, Phan Thiet resorts have a very soft price against other markets because this real estate market is in the stage of building infrastructure.
The price is expected to increase when infrastructure is completed and peak in 2020 when the Phan Thiet Airport comes into operation, according to him.
Griffiths said the majority of holiday home products in Binh Thuan launched before 2013 with low selling prices; after this period, the market suffered a downturn in line with the global economic crisis.
After the recovery of the economy, low real estate investment in Phan Thiet resulted in limited new supply and a bearish market with low achievable prices. Limited diversification and limited supply made the city less competitive compared to Da Nang and Nha Trang, according to Savills Vietnam. Binh Thuan has numerous approved projects by local developers, but many have been withdrawn because of delays.
Now, however, Rang Dong JSC is a major developer in Binh Thuan with the development of the large-scale Sea Links City. Novaland launched a holiday villa project in Mui Ne. Other local developers, such as TTC, FLC and TMS, are planning to launch projects in the near future. The progress of supporting infrastructure and the high price of major coastal cities has directed investment towards emerging markets like Phan Thiet.
Savills Vietnam reported Phan Thiet possesses ideal conditions for tourism development such as sunny weather, proximity to HCM City and beautiful beaches. Meanwhile, the holiday home market has not developed to its full potential and has not kept up with other coastal cities such as Nha Trang and Da Nang.
Many large-scale projects have had approval but delays continue due to the lack of supporting infrastructure and limited efforts by authorities to improve tourism products.
While other coastal cities have diversified tourism projects, the main product in Phan Thiet and Binh Thuan are mostly land plots, targeting speculators.
