Resort real estate could see 30% rise in transactions: industry association

Admittedly, this growth would be from a low base after transactions fell by 93.4% from 2022 to 726 last year, VARS said in a new market report.

The increased activity this year is likely to stem from higher demand due to an influx of foreign tourists, it said.

In the first two months of 2024 over three million foreign tourists visited Vietnam, a 68.7% year-on-year increase.

But the lack of new supply could hinder the segment’s growth, Nguyen Van Dinh, VARS president, warned.

New resort projects face many legal issues and are unable to go on sale, he added.

According to VARS data, the segment added only 3,200 new products in 2023, a decrease of over 80% from the previous year.

The remaining inventories mainly consist of luxury beach villas and resort shophouses that are difficult to sell even with steep discounts, Dinh said.

Concurring with this, Tran Trong Vu, co-founder of SPE.R Company, said many of them were built hastily to take advantage of a booming market and did not reflect local culture, and so fail to attract tourists.

Mauro Gasparotti, director of real estate consultancy Savills Hotels, said many previous projects in the segment focused solely on large scale instead of catering to tourists’ experiences.

"This is an opportune time for developers to adjust their business models and pay more attention to sustainable development to best convey the spirit of the resort industry."

Among the coastal cities and provinces, Gasparotti expected Da Nang City to grow at the fastest pace thanks to booming international tourism, especially from South Korea.

The city receives 25 flights a day from South Korea, or more than half of all international flights.

With developers making efforts to resolve legal issues and speed up projects, resort real estate supply could increase by 20% this year, with beachfront apartments accounting for 60% of it, Dinh predicted.