Danang’s condotel market will soon expand
The average absorption rate among condotels in Danang decreased significanly at over 65%, market research firm Colliers International reported. Condotels in Hai Chau District recorded the highest absorption rate at almost 75%, followed by Son Tra District and Ngu Hanh Son District at 62% and 58%, respectively. The average primary price among condotel units in Danang remained the same reached USD 2,250 per sqm.
There is no new project in Q2 2019 due to limited land bank, from the second half of 2018 til 2019, condotel supply in Danang remained nearly stable. In Ngu Hanh Son, Son Tra, and Hai Chau districts, large-scale luxury projects are the main attractions.
Due to limited ownership with a duration of 50 years for condotels was announced at June 2019, many investors concerned about the guaranteed return and difficulties in sales when ownership for condotels are no longer permanent. The status of condotel is approved as leasing, not for living; hence, Danang has to revised the unlimited ownership to the duration applied for commercial and trading properties. The 586 Group – company that own a condotel project has been withdrawn the red book and renew to 39 - year ownership due to its opening since 2008. This leads to the demand for condotel has decreased significantly and cooled down the condotel market.
Although the future of condotels in Vietnam are still unclear, investors evidently have persistent interest in the potential for future returns. In the near future, the supply of condotel projects in Danang will continue to expand, which will lead to fiercer competition among condotel developments. Thus, new projects will have to differentiate themselves from the rest by unique design and attractive sales policies.
Second-home villas scene remains stagnant
The average asking price for second-home villas in Danang has risen to more than USD 1,600 per sqm. Across the city, more than 90% of all second-home villas projects have been sold.
There are only 60 second-home villa projects in Danang, all of which is located in the districts of Ngu Hanh Son and Son Tra. Supply for second-home villas is expected to remain scarce in the future due to the lack of new projects.
The high demand for second-home villas in Danang came primarily from Northerners. Buyers from Hanoi account for more than 85% of all second-home villa purchases, while buyers from HCMC account for only 5%. The most important factors in the purchasing decision-making process are the developer’s reputation, and the high potential for long-term returns.
The second-home villa market has been relatively stagnant in recent times, and this situation is not expected to improve in the near future. Thus, the primary and secondary prices for second-home villas will likely increase steadily.
