50-70% of beachfront villas, shophouses go unsold in Q3

The firm’s latest report says only 389 beachfront villas, or below 30% of the total new supply in the third quarter, were sold nationwide. Nine of 15 property projects had a consumption rate of below 30%, the lowest since the beginning of this year.

Meanwhile, 691 beachfront shophouses, or some 50% of the total supply, were sold nationwide. In the central city of Da Nang, no shophouse transactions were made.

Condotel sales, meanwhile, was slightly higher than in the second quarter, with over 900 units changing hands. Most of the transactions were reported in the central province of Binh Dinh and the southern province of Ba Ria Vung Tau.

Liquidity of the condotel market, especially in Da Nang, decreased sharply against the pre-Covid period.

Vo Hong Thang, R&D deputy director at DKRA Vietnam, said the real estate market as a whole has faced a capital shortage recently because commercial banks have tightened credit. The beachfront villa and shophouse segment has not been immune from this development.

Higher inflation and interest rates, not to mention imperfect legal corridors have also been factors in the drop in liquidity as the market struggles to recover after the pandemic.

At a recent seminar, Tran Quoc Dung, deputy general director of property developer Hung Thinh Corporation, said the issuance of ownership certificates for beachfront villas and shophouses, which are considered non-residential, is still very slow, and there is no uniformity among the three laws on land, housing, and real estate trading, greatly affecting the psychology of buyers.

Le Hoang Chau, president of the HCMC Real Estate Association, said real estate-related legal corridors should be improved and unified so that issuance of condotel ownership certificates will go smoother first, then ownership certificates should also be issued for other kinds of properties such as beachfront villas and shophouses, and officetels.

According to the association’s statistics, Vietnam has some 83,000 condotels, mainly in tourism destinations, including Ba Ria Vung Tau, Da Nang, Thanh Hoa, Binh Dinh, Khanh Hoa, Binh Thuan and Kien Giang provinces. Total investment of condotel projects have stood at some VND100 trillion (over $4 billion).