Market turns its back on seaside villas

A report by real estate firm DKRA Vietnam says there were not many transactions in the resort villa segment in the second quarter of this year as many investors were impacted by the ongoing Covid-19 pandemic.

The consumption of seaside villas on southern Phu Quoc Island and in the central provinces of Binh Dinh and Quang Nam were at 6-7 percent of supply. Corresponding consumption in Ba Ria - Vung Tau Province was just 1 percent. In the central provinces of Binh Thuan, Khanh Hoa and Phu Yen, no seaside villa was sold, and inventory stayed at 100 percent in Q2.

Q2 sales remained very low in the condotel segment, too, stretching all the way from central Thua Thien-Hue Province to Phu Quoc Island, the report said. Only two condotel projects were launched in the past three months, adding 158 units. This marked a 93 percent increase in supply over the previous quarter, but a 96 percent drop over the same period last year.

Pham Lam, CEO of DKRA Vietnam, said that the situation in the resort real estate market in the second quarter was partly caused by the changing investor sentiment as the Covid-19 pandemic has still spread.

However, even before the pandemic, the level of investor interest in resort real estate remained low because of the incomplete legal status for these types of assets and the dispute that broke out over reneged promises of regular returns on investment.