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Vietnam sees new boom in vacation homes

In Uncategorized on June 28, 2010 at 4:51 pm




Vietnam sees new boom in vacation homes


QĐND – Monday, June 28, 2010, 22:6 (GMT+7)


Investing in vacation villas and garden-view houses in resorts and tourist sites is a new Vietnamese real estate trend, but it is not easy for companies to gain quick profits.


Le Duc Hien, deputy director of ViglaceraLand, said most vacation villa projects in Hanoi and neighbouring areas were in the process of construction, but many had attracted the attention of visitors thanks to their welcoming environment.

Le Duc Hai, director of the INT Group, said people were becoming increasingly interested in finding housing in more natural environments and vacation villas were more popular.


Getaway homes sometimes worth three to four times the value of urban houses. Despite the high costs, demand is set to outstrip supply in the near future.


Marc Townsend, general director of CBRE Vietnam, said investors had recently re-launched a series of real estate projects in tourism such as resorts, villas, seaside resorts which all indicated positive signs for the Vietnamese real estate market.


Customers interested in these kinds of investments are willing to spend large sums on high value, fully-furnished homes, with the additional benefit of being able to rent them out when not in use.


Le Canh Duong, deputy director of the Investment Promotion Agency in Da NangCity said in recent years, foreign investment capital had poured into real estate and tourist infrastructure, accounting for 80 percent of the city’s investment capital.


Duong said most on tourist real estate projects featured multi-purpose complexes including luxury hotels, vacation villas and apartments for rent.


According to Savills Vietnam, Da Nang is now home to seven vacation complexes including the Hyatt Regency, Furama Villas, Silvershore and Le Meridien. Prices range from 485,000 USD to 2.5 million USD per unit. Prices of sea-view villas are often much higher.


Nguyen Canh Son, from the Furama Villas, said vacation villas were a common type of product and developing a commercial strategy was not particularly difficult.


According to experienced investors in tourist real estate, the life cycle of such projects is much longer than apartment, office buildings or commercial centre developments.


Tourist property value depends heavily on planning and management capacity or project development and on the ability to lure consumers after construction is completed. A tourist real estate project may last decades. Therefore, it is difficult to implement the concept of “surfing” for this market segment.


According to Le Duc Hai, when investing in this market segment, investors should remember a number of issues such as the timing of investment, quality of planning and financial ability of investors. If they choose a completed project, low profits are likely, while new projects and a lack of information about first-time investors may lead to problems.


In addition, investors should also pay attention to the quality of project planning, and investment, design and management consulting. If the project was good but suffered from poor management, that would lead to a rapid decrease in value, Hai warned.


The recent land fever in Ba Vi, to the west of Hanoi, was a typical example of real estate speculation. People rushed to purchase farm land and build villas in the hope of earning high profits as Ba Vi has been earmarked as a future administrative centre. However, with the development of Ba Vi at least five years away, property prices have already dropped, leaving hasty land speculators holding on to overvalued plots.


According to Nguyen Tran Nam, deputy minister of Construction, investment should be for the long-term. If traders don’t take into account long-term planning, losses will be unavoidable.


Source: VNA


Source: QDND

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