9 - 12 - 2020
Contrast movement of land prices in coastal markets
Not only in the "capitals" of tourism but also emerging markets such as Rach Gia, Ha Tien (Kien Giang) that obtain the advantage of bordering the sea, land prices still slightly increase despite the pandemic. At the same time, the transactions also kept a stable pace with projects focusing on modern utilities, well-planned preparations, and existing residents.
Covid-19 is testing the durability of real estate businesses as well as the price tolerance of real estate segments. Although being affected more than other real estate segments, the resort real estate is still forecasted to be potential in the near future. Looking back at the coastal markets, even when transactions slowed down due to the pandemic, prices still tended to increase slightly, only some markets after a "feverish" period when prices increased too high, they observed a downward trend afterwards. Particularly in emerging markets, real estate prices are still soft, the upward trend in recent years has still clearly shown, of course, the level of price increase depends on each project or product.
In the Central area, according to a report by the Vietnam Real Estate Brokerage Association, in Da Nang, Quang Nam in the first 9 months of 2020, there were not many new projects offered for sale. The supply of infrastructure and legal projects (with red books) was scarce. In some markets, the selling price boomed in the 2018-2019 period, until this year 2020, there appeared to be a sideways situation, even decreasing prices.
For example, in Da Nang, according to the latest report of DKRA Vietnam, in the first 7 months of 2020, most segments suffered damage, in which, tourism and resort real estate were segments that suffered the worst damage. Having suffered a "compensation" blow from two Covid waves, real estate experts said, Da Nang's market is slowing down.
"The price of this area before was nearly 5 billion VND for a 1000m2 plot of land. But now they are selling it with the price of 4 billion VND, and no one asked to buy. For several months, the price stood still, there was no land goers, so, no buyers as well", Mr. Nguyen Van Viet, the owner of a real estate brokerage center in Hoa Xuan area (Cam Le district, Da Nang), complained.
According to Mr. Viet, the land price of Hoa Xuan in particular, the Southern area of Da Nang, including Dien Ban Town of Quang Nam province, increased dramatically from 2016 to the end of 2018. The land price at its "hottest" in Hoa Xuan was 6 billion VND/100m2 plot of land, of 7,5m road. In Dien Ban area, it was about 4 billion VND/100m2 plot.
Some emerging coastal markets have maintained a steady increase in prices even during the Covid-19 epidemic
Meanwhile, in the coastal city of Nha Trang - Khanh Hoa, like other big cities, it is very rare that new real estate projects have been approved recently. The market was bleak, land prices dropped sharply by 20-30%. However, there are still bright spots in projects located in areas with high potential development planning, invested in basic infrastructure with low starting prices … It is expected that such areas will have strong fluctuations in transactions at the end of the year and the beginning of 2021. As noted, over the past time, apartment prices in Nha Trang for the affordable and mid-end housing segments are around 22-30 million VND/m2. Previously, high-end apartments had prices from 40-60 million VND/m2; now, they have to adjust 20-30% to be sellable.
However, the Central region also holds some bright spots about real estate. For instance, in Quang Nam, the city projects have prices ranging from 40-60 million VND/m2, in developed districts ranging from 17-20 million VND/m2. Compared with the same period last year, land prices in this area increased slightly by about 10-15%.
In Binh Dinh - Phu Yen, this is the area considered to have a strong acceleration of infrastructure development in the period of 2019-2020. Especially in Binh Dinh, the third quarter of 2020 has started a series of industrial and urban projects. The auction projects here are also thriving. Accordingly, real estate prices here still tend to increase slightly.
Although the market has many obstacles, one common point of the costal property real estate market is that the majority of central coastal projects are deployed in the form of villas, townhouses or condotels. The average price of ready-built villas is about 20-50 billion VND/unit. While condotels also fluctuate about 2 to 5 billion VND/unit. The type of coastal land plots recorded in low supply. Particularly, in the center of tourist cities, almost the sea frontage is filled with a series of luxury hotels and large investment projects. Therefore, projects on the sea front in the central area recorded a drip supply with a very high selling price. According to recorded land frontage prices in Da Nang ranged from 400-470 million VND/m2, Khanh Hoa 450 to 530 million VND/m2, Phu Quoc 150-200 million VND/m2, Binh Thuan 80-100 million VND/m2.
In the Southeast area, the coastal land of Ba Ria - Vung Tau is one of the places in which the local has strongly developed real estate projects since early. Therefore, the level of price increase in coastal property in this local has been quite high over the years.
According to local brokers, land prices in Xuyen Moc, Binh Chau (Ba Ria - Vung Tau)have increased sharply, especially in coastal routes when there is information about major projects are about to be deployed. If in 2018, investors bought for only 15-30 million VND/m2; at the moment, the price increases to nearly 40-50 million VND/m2, very few people are willing to sell.
Land plots, residential land not far from the sea always have active transfer transactions. However, with the coastal land fund, there are almost no transactions due to being held by large investors, despite the increasing prices. An increase has been recorded between 20-30% in the past 1-2 years.
Villas with a land area of 350-500m2 in March 2019, the price was still around 41-43 million VND/m2, which now has increased from 43-47 million VND/m2 in early 2020. In addition, some condotel apartment projects in January 2019 cost about 55-65 million VND/m2 and from the first quarter of 2020, reaching 60-66 million VND/m2, shophouse prices are quite high, about 73-75 million VND/m2. Even the agricultural land in this area increased in price from 1,5-2,3 million VND/m2, instead of 1-1,2 million VND/m2 at the end of 2018.
In the Southwestern area, Phu Quoc, Rach Gia, Ha Tien are the coastal markets attracting investors with the impressive real estate prices recorded to increase recently. According to Kien Giang Tourism Department, up to now, Kien Giang province has attracted 323 investment projects in the tourism industry, with a total investment of VND 355,667 billion. Kien Giang is the leading province attracting investment in tourism within the Mekong Delta region.
However, a specialty in this area is that real estate prices in emerging coastal markets such as Ha Tien and Rach Gia are still quite soft, so it is expected the spare ground's price increasing is large. That is the reason, over the past time, many investors rushed to this market to seek for profits with well-planned and fully-equipped coastal land projects.
Although affected by the Covid-19 pandemic, according to records, Ha Tien's land price has kept its pace of growth. In particular, active trading transactions, especially the areas bordering the sea, are being renovated as infrastructure. In relation to the research, Ha Tien new urban area in Phao Dai ward, due to the concentration of modern facilities, well-planned and existing residents, is invested and purchased by many customers for business activities. The average land price is 13 - 20 million VND for adjacent and sea fronts locations. This price is considered quite soft and has room to increase prices.
In this area, after a vibrant period of Phu Quoc market, investment cash flows started to shift to Ha Tien and Rach Gia. The ground in some areas has increased from 5-7 million VND/m2 to 10-20 million VND/m2 in this period after about 2 years.
Recently, many investors poured to Ha Tien market to seek profits with well-planned coastal land projects and full utilities.
Specifically, if in July 2017, the price stopped at 2.8 - 3.9 million VND/m2, so far it has increased from 13-20 million VND/m2. In the area of Bai Cay Bang, the land area of 1000m2 in 2017 was about 1.5 million VND/m2 without any residence, in mid-May, it increased sharply to 5 million VND/m2. The frontage of Nguyen Phuc Chu street is expanding also from 7 million VND/m2 to 20 million VND/m2, even up to 50 million VND/m2. The My Duc resettlement site also recorded an increase of nearly 400%.
Investors assessed that, although increasing, this price is still soft compared to the average ground in cities across the country. In which, the sea front position in the center is only about 20 million VND/m2, which can exploit tourism well, so the profitability is very potential.
The reason for the good growth of Ha Tien's land price in recent years is due to the attraction of investment capital and infrastructure. From 2019, Ha Tien City has attracted a lot of capital in many fields. According to information from the center of investment promotion - trade - tourism of Kien Giang province, among 117 projects calling for additional investment in Kien Giang province in 2019, in the period of 2018 - 2020, Ha Tien City has 18 enterprises invested in Thuan Yen industrial zone with a capital of 2.600 billion VND.
The development of residential areas, urban areas, resorts, commercial - entertainment center and golf attracted 16 projects with a total investment value of trillions VND. Noteworthy such as Bai Bang luxury resort (99ha), Phao Dai urban complex (Lot A5 -10ha), Phao Dai beach tourism service urban area (99ha), Thuan Yen beach tourism service urban area (99 ha), Ha Tien international border gate's golf course and resort villas (99 ha), Hai Tac island eco-tourism area (30ha), … The above projects are being applied for investment policies by some enterprises such as VinGroup, City Land, Ha Do Group, CNT Group, …
Besides, the regional infrastructure is receiving a lot of positive information, which is also the reason why the real estate here is bustling. Specifically, the Lo Te - Rach Soi expressway connecting from Can Tho to Rach Gia (Kien Giang) is already opened. Route 80, 15.5 km long, is under construction to expand the section from Kien Luong to Ha Tien city, and is expected to be completed by the beginning of Q1/2021. When put into operation, these two routes will shorten the distance from Can Tho to Ha Tien to 2 hours of driving instead of 3 hours as currently. At the same time, it helps to connect Ha Tien to provinces in the Southwest region. This is the premise for the city to develop tourism and welcome investment capital. In addition, the expressway Ha Tien - Rach Gia - Bac Lieu and My An - Cao Lanh have also had a policy of investing in order to add motivation to the development of the real estate market here.