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Property firms in Danang expect better liquidity
Similar to project owners in HCM City, property developers in Danang are mired in troubles and have to launch promotion programs to lure buyers, but the market there has recently shown positive signals.
Adam Bury, senior manager of research and consulting department at the research firm CB Richard Ellis Vietnam (CBRE), noted that though the real estate market is causing many difficulties to investors, the macro-economy has seen signs of optimism, which would help regain confidence of buyers.
He cited a market research conducted in Danang, saying that a slight change in prices has occurred in the luxury apartment segment of the central city in the first quarter, yet offering prices remained stable. Trading mostly took place in the mid-end segment, with 310 transactions recorded at the property projects along the coast or in the city’s downtown.
The apartment market of Danang is quite small compared to other cities, with only 2,500 apartments, including 300 luxury units priced at US$2,975 per square meter, some 1,000 high-grade units priced at US$1,786 a square meter and around 1,200 mid-end units at US$937 each square meter.
“The market has shown positive signals,” said Bury, adding these signals, albeit modest, had important meaning as they indicated changes in the market after 1% of the supply had been traded.
According to CBRE, several trading contracts were terminated by project owners in Danang, as well as other localities. However, such contracts were later replaced by new transactions in the first quarter.
Homebuyers are interested in completed apartments and near-completion ones, or those with guaranteed construction progress.
Meanwhile, transactions remained the same in the villa segment since new transactions equaled those cancelled by project owners. There are currently 572 units in this segment, with unchanged offering prices in the first quarter.
In the resort segment, renowned developers have more advantages in attracting customers.
Hyatt Regency Danang Residences, a resort project developed by Indochina Land, has recorded good sales as 22 out of the total 27 villas have been sold at VND28-40 billion per unit. In addition, trading is quite favorable at the apartment blocks of the project, consisting of 156 high-end apartments priced at VND4-15 billion each, 90% of which has been occupied.
Michael Piro, sales and marketing director of Indochina Land, said 62% of the investors in Hyatt Regency Danang Residences was from Hanoi, 18% was from HCMC and 12% was foreign investors.
Indochina has joined hands with Sotheby’s International Realty to enhance marketing and sales activities. Through a multinational office network of Sotheby’s International Realty, the projects of Indochina Land, such as The Nam Hai, Six Senses Con Dao, Hyatt Regency Danang Residences, and the villa section The Estates of the golf course Montgomerie Links, will be introduced to potential customers in foreign countries.
Piro, who is also country director of Vietnam Sotheby’s International Realty, said his company would expand the sales network to the global market in order to lure attention of international buyers in Vietnam’s realty market. Recently, two villas of The Nam Hai and one coastal villa of Hyatt Regency Danang Residences have been successfully sold.
According to CBRE, an additional 133 villas from three new projects in Danang will be offered for sale this year, at US$500,000-800,000 each. Meanwhile, the apartment segment will welcome 217 new units priced at US$700-1,500 per square meter.
Although the monetary tightening policy remained in place last quarter, several transactions were recorded in the villa segment, meaning a part of the society still has abundant and available assets, said CBRE. It is expected that when the monetary policy is loosened, the liquidity of the central property market will prosper.
The Saigon Times
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