|The condotel development Grand World Phú Quốc. — Photo condotelvietnam.com|
HÀ NỘI — Condotels are becoming a hot development target in the real estate market, as international tourists flock to Việt
The condotel market is forecast to keep booming in 2018. But the rapid development has left many concerned about oversupply.
Supply exceeding demand?
According to data from the Việt Nam Real Estate Association (VNREA), in 2017 condotels became the brightest star in the resort real estate sector. The investment in condotel projects has accounted for more than half of total inflows into the real estate market. The supply of condotel products hit 22,837 units across developments throughout the country. Successful transactions account for 65-70 per cent of the volume offered.
The above numbers show the excitement focused on this segment of the real estate as well as the potential for investors. This year, it is forecast that there will be 29,000-33,000 condotel units available for sale.
Stephen Wyatt, CEO of global real estate services firm JLL Việt
The Việt Nam National Administration of Tourism reported that international visitors to Việt
In addition, according to the Law on Tourism 2017 approved by the National Assembly, the Government expects the tourism industry to develop into a key economic sector in the future. Supporting policies and investment incentives will create momentum for resort real estate.
In addition, Việt
With this foundation, 2018 is expected to be another exciting year for resort real estate as investors simultaneously introduce their projects to capture the wave of development of Việt
As for the question of whether condotel developments have crossed the threshold into oversupply, Wyatt said the answer was uncertain and depends on the overall future of the tourism industry. And at the moment, tourism was a promising sector thanks to the Government’s commitments to playing a supportive role.
It is necessary to focus on quality, business strategy and commitment to profitability in order to adapt to the growing market and increasingly tight legal framework of this market, Wyatt suggested.
Need a plan
According to Wyatt, there are three main reasons this type of vacation apartment attracts investors.
First, resort condominiums hit the investment market within the last three years, so the competitiveness of this sector is still low compared to other markets such as apartments, townhouses, villas and land plots. In addition, this type of real estate is attractive to investors because developers typically promise that investors will receive a certain amount of profits.
Second, like other types of real estate for sale, this type of product offers a rapid return on investment.
Third, the 2017 Tourism Law identifying tourism as a key economic sector in the future will create momentum for the development of resort real estate.
However, many management agencies and experts say the condotel boom demands strategy and planning.
The planning should be based on demand and must be designed to create demand. Some localities report they have experienced dramatic increases in tourism after a condotel is built.