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Second-homes: Potential new market
Besides land, apartments and villas, property investors are now paying great attention to a new potential market: the second-home market. CB Richard Ellis (VietnNam)’s executive director Richard Leech spoke with VNS about the property market in Viet Nam.
Could you please tell us something about the second-home market?
A second-home is defined by investors as not a primary home. It serves to provide a relaxing place for families to stay on weekends or holidays. However, when unused, second homes can be available for lease, which can bring in additional income.
Frequently, second homes are in a hotel, resort or golf club complex or in the mountains. Services such as maintenance, management, rental payment are undertaken by a resort management board.
What benefits do second homes bring to investors?
Investors often buy a second home because they want to have a place to stay when on holiday with the family.
A second home is also a way to gain capital.
People buy a second home because they expect two things to happen. First, when they don’t use it, they can lease it out so that they can earn extra income. Second, the value of the second home will increase so that when they don’t want it anymore, they can sell it at a higher price and enjoy the capital gained.
Investors don’t want to invest all of their capital in one field. They can invest in the stock market, in gold, in property. So, the second-home market is an opportunity for them to diversify their investment risk.
When investors get older, they may want to rest more in a home near a beach, golf course or the mountains. So a second home is useful when they retire. People can also invite friends to their second home.
How do you feel the second-home market is developing in Viet Nam?
Despite the fact that the second-home market is a new concept in Viet Nam in comparison with other countries in the region, Viet Nam’s property market has received a significant amount of investment in tourism and tourism infrastructure over the past two years.
Moreover, the country’s economic situation in the first half of 2009 has shown some signs of recovery, with a significant fall in inflation, a sharp increase in the stock market and lower interest rates offered by the State Bank of Viet Nam.
Also the Government’s stimulus package is helping enterprises cope with the global economic crisis and an increase in residential sales in Ha Noi and HCM City.
In the next two or three years, there will be more than 5,000 new villas and condos in the northern region. Real estate developers see potential opportunities in an emerging market like Viet Nam.
What are the specific second-home projects in the north?
The first project is Long Chau Villas&Residence, which is invested by Ha Long T&H Joint Stock Company.
This is a villa community project that has 700 units on Tuan Chau Island in the northern city of Ha Long. The project covers an area of 338.45ha.
The project includes an 18-hole golf course, a cruiser pier, villas. The total investment capital is US$330 million. About 50 luxury beach-front units – the project’s first phase – will be open in 2011.
There are two other big projects in Hai Phong – Song Gia Resort Complex and Cat Ba Resort Community by Vinaconex ITC. They are tourism-entertainment-resort complexes.
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