VietNamNet Bridge - Not all resort real estate projects along the coastline are attractive to investors, but beachfront villas have been a magnet to investors for the last six months.

 

 

BCG, a US-based consultancy group, said that about 3 million Vietnamese in the middle and upper income groups have demand and financial capability to buy seaside villas worth $250,000 to $1 million. The figure is expected to reach 3.3 million Vietnamese by 2020.

Vietnam has caught the special attention from the world’s investors to its coastal resort properties, especially now that foreigners now can buy houses in Vietnam (beginning July 1, 2015).

A survey by Wealth-X magazine, super-rich people, in Asia, Europe and North America, are all eyeing high-end real estate in South East Asia because of the reasonable prices.

According to Viet An Hoa’s CEO Tran Khanh Quang, there are seven reasons behind the new investment wave in seaside villas.

First, the villas belong to the ‘second home’ category of products. A report shows that 600,000 households in the UK have second homes, while the figure is 15 percent in China’s largest cities. 

Meanwhile, Vietnam’s GDP by 2020 is expected to be equivalent to the GDP in other South East Asian countries. Second home ownership could be a trend in Vietnam in the near future.  

Many different types of resort real estate exist, from villas in large cities and the countryside to houses on plateaus or mountains. However, villas with views to the sea are the most attractive, particularly for relaxation, holidays and winter vacations.

A report showed that going to beaches is the top priority choice of 70 percent of travelers. 

Third, seaside villas all have high value, from $500,000 to several million dollars, which only the rich can afford. The villas are status symbols for many.

Fourth, investors will not build beachfront villas everywhere, but only build high-end products in a limited quantity in most advantageous positions with beautiful views to the sea.

Fifth, beachfront villas bring the highest profitability compared with other types of real estate. The profit the investors can expect from street-front houses and apartments is 3-6 percent, while it is 8-10 percent for offices for lease and 10-16 percent for beachfront villas.

Sixth, the vacation ownership model is becoming more and more popular in Vietnam.

Seventh, the new law allowing foreigners to own houses in Vietnam will lead to increasingly high demand for resort real estate, including beachfront villas.

VNE