Is the Phu Quoc Real Estate Market entering the race?

When the economy and tourism recover, townhouses and resort shophouses in the southern region will also archive high liquidity. In this context, the transaction volume of Phu Quoc increased significantly, accounting for 95 % southern region.

From November 2021, Phu Quoc will be an experimental destination for international tourists using vaccine passports. As a result, by the end of 2021, this area will have received over 420,000 visitors, with over 3,200 overseas visitors. Especially, tourism here welcomes about 120,000 international and local visitors in just 9 days during the Lunar New Year.

Particularly, during the recent holidays from April 30 to May 3, Phu Quoc received 292,000 tourists, a more than 65 % increase over the same period last year. This astounding result indicates that the "fulcrum" for the resort real estate market has progressively emerged.

According to recent records, the big guys like Vingroup, TTC, Sungroup, BIM Group, CEO Group, and others are restoring their race in the Phu Quoc real estate market after a period of silence. Among that, some companies have been owning a land fund for a long time back to 10-12 years ago, but now is the time to launch the project on the market in order to welcome the resort and tourism market's recovery wave.

An industry expert said that compared to other resort real estate markets, Phu Quoc has the advantage of being a traditional tourist capital, attracting a very stable number of tourists over the years. Accordingly, resort real estate here has strong growth momentum. For long-term legal real estate projects, it is almost a "bargain" that is sought after by investors.

While the condotel type has suffered a significant decrease in both supply and demand in recent years as a result of the pandemic, commercial townhouses/shophouses and sea villas appear to get caught in the spotlight in the resort real estate market. This model remains a healthy growing segment among tourist complexes developed by prestigious investors.

According to DKRA Vietnam's April 2022 resort real estate market research, there is potential for development and high liquidity in the kind of resort shophouse thanks to the recovery in the economy and tourism. In April 2022, the consumption rate of new supply reached 58%. Among that, 39% of total transactions come from the South, primarily in Phu Quoc, which accounted for 95% of total regional transactions. 

A seaside shophouse is the “highlight” of the resort real estate market

According to Mr. Vo Quoc Khanh, General Director of TTC Phu Quoc cum General Director of TTC Land, the seaside shophouse product in sophisticated urban areas has seen an impressive price increase over the years due to a limited new supply and diverse businesses in the tourism area.

According to a DKRA Vietnam representative, seaside and commercial shophouses have a relatively high average price rise rate in primary sales. For instance, the growth rate of this type in April 2022 increased from 15% to 23% compared to the previous month. DKRA Vietnam forecasts that in the next months, outstanding future supply will mostly come from projects in the South, notably Phu Quoc and Ba Ria – Vung Tau. All the projects listed above are currently at the reservation stage.

Mr. Vo Hong Thang, Deputy Director of R&D DKRA Vietnam, commented that after two years of being seriously impacted by the Covid-19 outbreak, starting from the end of 202, the tourism market began to enter a strong rebound momentum and continued during the first months of 2022.

Resort real estate experienced a recovery in some segments such as resort villas and resort townhouses/shophouses in the first quarter of 2022 alone, with a sharp increase in supply and consumption compared to the same period last year. Along with the economic recovery and tourism boom, this is considered as a premise for the recovery of the resort real estate market in 2022, as well as creating a driving force for the growth of the resort real estate market.

According to Mr. Thang, resort real estate is an investment channel with significant potential for long-term and sustainable growth. In particular, the tourism industry is currently seeing a significant recovery. According to statistics from the Ministry of Culture, Sports, and Tourism, international visitors reached nearly 91,000 arrivals in the first quarter of 2022, an increase of 89.1% over the same period last year, with flight arrivals accounting for nearly 90.5% of international visitors to Vietnam, a 165.2% increase. Domestic tourism earned several promising signals, with a projected 26.1 million visitors.

With the activation of the "vaccine passport" and the opening of the territory to international tourists on March 15, 2022, the tourism industry in general and resort real estate across the country witnessed significant changes. Meanwhile, the resort real estate market has seen remarkable highlights, especially the resort townhouse/shophouse segment, which has seen 12.4 times and 14 times increase in supply and consumption, respectively more than the same time period last year.

"Although there are still numerous challenges, and obstacles from both objective and subjective factors such as global political instability; Zero-Covid rules in some countries with significant contribution of visitor in the tourism structure to Vietnam; problems and shortcomings in the implementation of issuing ownership certificate for condotels and officetels may impact both the tourism industry and the resort real estate market. However, we can still be positive about the growth of Vietnam's tourism industry in general, and the resort real estate market in particular in the coming time. Last but not least, resort real estate would be one of the key segments leading the real estate industry in the future," Mr. Vo Hong Thang predicted.

Source: CafeF