Da Nang real estate market welcomes new condotel development wave

After a period of stagnation, the Da Nang hospitality market is showing signs of recovery, especially the condotel segment, according to a popular real estate site - batdongsan.com.vn.

After a period of stagnation, the Đà Nẵng hospitality market is showing signs of recovery, especially the condotel segment, according to a popular real estate site - batdongsan.com.vn.

With the strong recovery of the tourism industry, condotels and luxury apartments in Đà Nẵng are considered by investors to be attractive opportunities to find profits.

According to data from batdongsan.com.vn, condotels, which are apartments but are serviced as if they are hotels, showed a significant increase in interest in mid-2024. Selling prices were on the rise, ranging from VNĐ40 million (over US$1,570) per sq.m to over VNĐ100 million (over $3,900) in the first three quarters of 2024.

Notably, in the first ten months of 2024 condotel prices in Đà Nẵng increased by 22 per cent compared to the same period in 2023.

Speaking at a workshop about Việt Nam's real estate market 2024  held in Hà Nội on Wednesday, Nguyễn Quốc Anh, deputy general director of batdongsan.com.vn, said that the potential of condotels in the future depends largely on the tourism advantages of each market.

Localities with tourism potential, systematic investment, developed infrastructure and positive policies will be the destination of choice for investors who are interested in generating cash flow from accommodation services for tourists.

Hà Nghiêm, director of Batdongsan.com.vn branch in Đà Nẵng, said the profits from apartments and condotels in Đà Nẵng come from high-priced rentals for tourists.

According to the Đà Nẵng Statistics Office, in the first ten months of 2024, total revenue from retail sales of consumer goods and services was estimated at VNĐ114.3 trillion, up 14.1 per cent over the same period last year. 

Revenue from housing and land in the area reached more than VNĐ2.5 trillion, up 13.6 per cent over the same period in 2023 and contributed 11.8 per cent to the city's total domestic revenue.

In the fourth quarter of 2024, Đà Nẵng rental prices witness an increase of 28.3 per cent compared to the first quarter, second only to Hưng Yên and Hà Nội, with the one-year rental yield at 4.2 per cent. 

Investors of branded real estate products also believe that limiting the quantity can ensure cash flow for condotels, generating sustainable profits, higher value and liquidity.

Data from Batdongsan.com.vn also shows that investors from Hà Nội have accounted for the majority and they have had strong growth in interest in Đà Nẵng apartments and condotels. 

In the third quarter, the number of Hanoians searching for Đà Nẵng apartments and condotels increased by 30 per cent compared to the previous quarter. 

In addition, the interest of investors from HCM City for Đà Nẵng also increased by 20 per cent. 

High-end apartments with an average price of VNĐ55-80 million per sq.m and luxury apartments with an average price of over VNĐ90 million per sq.m accounted for a larger proportion of the supply in major cities. 

In the third quarter of 2024, the number of listings of luxury apartment for sale increased sharply by 22 per cent in Hà Nội and 20-23 per cent in HCM City compared to previous years. 

In Đà Nẵng, prices of luxury apartments both in the inner city and hospitality region have grown, while the prices of this segment in Hà Nội and HCM City tended to be flat, said an expert as cited by batdongsan.com.vn. 

Đà Nẵng market also witnessed higher interest level during the third quarter of 2024. While the interest level was almost flat for Hà Nội market in the third quarter of 2024 compared to the first quarter of 2023 and decreased in HCM City market. 

The main reason given was the sharp increase the proportion of the luxury apartment supply in Đà Nẵng market, from 38 per cent in the first quarter of 2024 to 62 per cent in the third quarter of 2024, said the expert.

The highlight of the luxury apartment segment is the 'branded residence' products. These high-end projects have been developed under cooperation with famous brands to supply luxury services and amenities to the market.

To date a number of international branded residence brands have entered Đà Nẵng market, creating diverse experiences for accommodation and tourism.

Đà Nẵng possesses advantages in nature, culture and developed infrastructure, a crossing of many factors which make it an ideal destination for resort real estate, especially luxury real estate.

According to Trương Thị Hồng Hạnh, director of Đà Nẵng Department of Tourism, Đà Nẵng focuses on improving quality of tourism products and services and prioritising the development of high-end and super luxury products and services.

Therefore, Đà Nẵng has attracted many famous brands in the world, such as Nobu, Hyatt, Marriott, IHG, Accor and Melia, to participate in investing and managing high-quality property projects.

According to a survey of Đà Nẵng brokers, Đà Nẵng real estate market had positive performance in all segments in the third quarter of 2024 compared to the first quarter, especially the apartment and condotel segments. Searches for condotels and apartments increased significantly by 45 per cent.

About 27 per cent of brokers surveyed said that the condotel segment will grow strongly, while 55 per cent of them assessed that it is gradually recovering. A few high-end condotel projects along Mỹ Khê beach that have been granted construction permits are also a positive signal for the recovery of this product line. — VNS

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