Central tourist destination seeing slower growth in condotels due to legal factors, according to latest Savills report.
A total of 14 projects have supplied condotel stock in Da Nang to date, according to Savills’ Da Nang real estate market 2H 2018 report.
No new projects or next phases were recorded last year. “Contrary to the boom period two years ago, the growth rate in Da Nang’s condotel market slowed significantly in 2018, mainly due to the impact of legal factors,” said Ms. Do Thi Thu Hang, Associate Director, Research & Consulting, at Savills Vietnam.
Ngu Hanh Son district led with 52 per cent of supply. From 2019 onwards, 16 future projects will come online. In the second half of 2018, the market-wide absorption rate increased 9 percentage points (ppts) quarter-on-quarter due to limited primary supply. The primary price ranged from $1,800 to $3,800 per sq m.
Condotel market stock
Similarly, Da Nang’s hotel market saw soft performance last year. Total stock was approximately 13,400 rooms. Average occupancy decreased 7 ppts year-on-year due to large new supply. The average room rate (ARR) was down 9 per cent year-on-year and RevPAR was down 18 per cent.
Da Nang continues to establish itself as a leading destination for domestic and international tourists. It welcomed 7.7 million visitors last year, up 16 per cent year-on-year. International visitors were up 23 per cent year-on-year to 2.9 million. In 2019, approximately 2,200 three- to five-star rooms will come online.
Hotel market stock
Meanwhile, second-home villas in Da Nang also witnessed limited new supply in 2018. Total villa stock came from 16 projects. Ngu Hanh Son district was the largest supplier, representing a 91 per cent share from 13 projects. In 2019, 45 dwellings will come online.
Limited new supply and stable demand has resulted in market-wide high absorption to date. Developer reputation, guaranteed returns, and beach proximity were key success drivers.
VN Economic Times