Resort properties find few takers amid low market sentiment

Some 2,180 villas were launched, but only 25 units were bought, according to a report by property services company DKRA Group.

Prices went flat on the primary market, while on the secondary market sellers sold at a 10-20% loss, it added.

Incentives such as rental guarantees, buy-back offers and interest rate support were offered but failed to yield results, it said.

In the beach houses category, 2,907 units were available at existing projects, but not even one was sold.

Secondary market sellers were willing to suffer losses of 30-40%. In the case of condotels, 192 were sold out of 4,826 on offer.

Data from the Vietnam Association of Realtors showed that in the first six months 1,799 units were sold, down 80% from the same period in 2022.

Resort property remains in "hibernation," Nguyen Anh Tuan, vice chairman of the Khanh Hoa Real Estate Brokers Association, said.

Developers continue to be cautious after prices plummeted in this segment during the Covid pandemic, he said.

Compared to other segments like residential and office properties, resort units require larger investments but take longer to break even, he said. "Investors are not buying because selling them later will be challenging."

The lack of a clear legal framework regulating resort properties such as condotels, resort villas and shophouses also makes it risky for buyers, he added.

Vo Hong Thang, deputy director of DKRA Group, said buyers have low confidence in resort properties because of past cases of developers failing to honor their commitments on profit guarantee, issue of ownership documents and handover schedule.

Property analyst Nguyen Hoang said there is oversupply in the resort segment after thousands of units were built between 2015 and 2019 and not sold.