Danang land plots no longer hot properties

A sense of gloom pervades the real estate market in Danang, especially the land plot segment, once considered the “hen that lays golden eggs.”

Insiders attribute the situation to the State Bank of Vietnam tightening real estate credit and high prices.

The current sluggishness is a far cry from the recent past, when Danang was seen as the focal point of the central region’s property market, with the land plot segment highly sought after by investors.

However, there appears to be a serious slowdown in this segment of late.

Bui Hoang Cuc, a resident of the central city’s Ngu Hanh Son district and an experienced real estate broker, said the entire market, not just the land plot segment, was sluggish.

Cuc said land prices in Danang were not just going sideways, there were many cases of sellers reducing prices by about VND300 million ($12,500) per lot to try to sell them quickly, because they could no longer bear the high bank interest rates.

Data from real estate consultant DKRA Vietnam shows that in the year to August, there were six projects for sale in Danang and its surrounding areas, including two new ones and four next-phase segments, providing the market with 423 plots, up 15% month-on-month - 400 in Quang Nam province and 23 in Danang.

Since then, the 101 plots sold are all in Quang Nam province.

Liquidity is low because of high selling prices and other factors including the strengthening of credit control in real estate by state management agencies, and unstable world economic situation. Such pervasive risks were making investors more cautious and careful, said DKRA Vietnam.

Resort segment looking up

According to FERI, a division for financial, economic and real estate studies of real estate developer Dat Xanh Group, the market in the central region recorded modest supply in the third quarter of 2022, with inventories accounting for about 75%.

Selling prices remained stable in almost all segments during this period, with the land plot segment in Danang carrying the highest price of VND52 million ($2,170) per square meter. The lowest price in the central city is VND26 million ($1,090) per sq.m.

Other localities have prices ranging from VND13 million ($540) to VND45 million ($1,880) per sq.m.

Notably, the apartment segment recorded an increase of 5-10% in selling prices in some areas. Danang has prices ranging from VND58 million to VND110 million ($4,600) per sq.m, while the figure for Khanh Hoa province is VND42-70 million per sq.m.

“In the short and medium term, the resort real estate market promises good recovery, with the return of apartment and resort projects in Da Nang, Khanh Hoa and Nghe An. Big names are preparing to develop complex projects which are a bright spot for attracting investors in the near future.

“Novaland, Vingroup and Viva Land have recently announced new projects in Khanh Hoa, Binh Thuan, and Lam Dong,” the FERI report says.