According to assessment of real estate industry consulting firms in Viet Nam, Da Nang boasts high potential for strong growth of real estate industry after the COVID-19 pandemic. The segments of resort properties, apartments and land lots are seeing an increase in value.

Tourism recovery drives the development of resort properties

The recovery of the tourism sector has spurred the growth of some segments of the real estate sector in Da Nang, especially the 4-5 star hotel market.

“In the first half of 2022, average rent in Da Nang hovered around USD 70 (equivelant to VND 1.8 million) a room per night, and the occupancy rate stood at 26.3%, up 11% and 15% respectively compared with the same period in 2021. Hotel room rates in the city have bounced back quite quickly and have recovered nearly 70% of  the pre-pandemic level," said Mrs Duong Thuy Dung, the CEO of CBRE Vietnam Co., Ltd.

The Han Riverside area will attract investment in high-rise apartment buildings to offer luxury apartments, shaping a new trend in the development of the city’s real estate industry. Photo: HUY TUAN

Data provided by CBRE Viet Nam shows that Da Nang attracted two new 4-5 star hotel projects during the first part of 2022, namely Radisson Hotel Da Nang with 182 rooms and Mikazuki Da Nang with 294 rooms, bringing the total 4-5 star hotel projects in Da Nang to 81 with 15,343 rooms in total, in which, 5-star hotels accounted for 38% while 4-star ones accounted for 62%.

By the end of 2022, Da Nang is expected to attract 10 new hotel projects with 2,442 rooms in total, bringing its total hotel projects to 91 with nearly 18,000 rooms. The supply of new hotel rooms will make the city’s real estate market more bustling, even though it has not been able to bounce back to the pre-pandemic level due to the unpredictable developments of COVID-19 in the world.

According to CBRE, by 2024, Da Nang is forecast to attract 99 new 4-5 star hotel projects, with over 21,000 rooms in total. The presence of the world’s hotel brands in the city will help to enhance the position of the luxury hotel market in Da Nang.

“Resort properties in Da Nang stay on top of Viet Nam’s real estate market following rapid rebound of the city’s tourism industry after COVID-19. In its efforts to realise the goal of developing it into a smart sustainable city, Da Nang will focus on developing luxury housing segment in addition to promoting the development of resort properties. This is an important step for Da Nang to improve its competitiveness and increase the resilience of the its real estate market,” said Mrs Dung.

Centrifugal growth in real estate industry

Da Nang real estate market still takes its central area as the main pillar for its development, but its development trend in the medium and long- term goals will focus on centrifugal growth which features expansion of satellite urban areas to the northwest and southeast parts of the city.

According to CBRE, this development trend shows that the city’s mainland housing market and the market value of the city’s properties have increased significantly compared to pre-pandemic levels. In the second quarter of 2022, a combined total of 106 villas and townhouses of the Sunneva Island Project located in the Hoa Xuan urban area and 34 apartments of the Regal Pavillion Project located at Hoa Cuong Nam Ward, Hai Chau District were sold out. Particularly, selling prices of items under the Sunneva Island Project range between VND 80 million and VND 100 million per square metres.

The recovery of the tourism industry is driving the growth of many segments of the city’s real estate sector. IN THE PHOTO: A view of Sunneva Island Urban Area Project located in the Hoa Xuan Urban Area developed by SunGroup. Photo: TRIEU TUNG

According to DKRA Viet Nam Joint Stock Company, the real estate market in Da Nang and its vicinity showed positive signs of recovery across supply and consumption terms in most segments of the real estate sector in the first half of the year. The new supply of the land lot segment in Da Nang is expected to range from 2,000-2,500 lots during the second half of 2022, mainly concentrating in the southeast of the city like Ngu Hanh Son District, Dien Ban Town, Hoi An City, both in Quang Nam Province, according to DRKA forecasts. The overall demand for real estate market is predicted to increase with a focus on projects with full legality, comprehensive infrastructure system. Especially, riverside real estate projects will boast competitive advantage and will be attractive to buyers.

For the apartment segment, new supply in Da Nang is expected to increase by about 600-800 units in the second half of the year compared to the first half. Luxury apartments stay on top of the supply of the city’s real estate market.

Data provided by CBRE shows that the total supply of apartments now stands at 7,378 units from 20 projects underway while the purchase rate reaches 92%. The selling price of luxury apartments increased by 6% compared to 2021. Among these luxury apartment projects are The 6Natura located in Phuoc My Ward, Son Tra District and The Sang Residence located in Khue My Ward, Ngu Hanh Son District.

According to CBRE, the luxury apartment market will play an important role in Da Nang’s real estate sector because this segment is witnessing the rapid changes in its architectural designs in a bid to offer high-class living places. The city boasts high potential for strong growth of the luxury apartment market as real estate project developers focus on creating riverside real estate and building iconic works on riverside areas in a bid to increase the economic value of their real estate investment.

Reporting by TRIEU TUNG – Translating by H.L