Da Nang real estate market: soon ripe soon rotten
Da Nang real estate market: soon ripe soon rotten
Danang, often cited as having the most beautiful beach on the planet, witnessed a remarkable surge in the development of luxury resorts in recent years. Now, many of them are sitting idle.
Recently, while attending a press conference announcing yet another big real estate project in Da Nang, this reporter took a moment to ask the interpreter a few private questions. Did the woman, a Hanoian, have any personal plans to buy an apartment in the project and settle down in Da Nang?
The answer was an abrupt “No”. Of course, neither reporter’s question nor the reply were conveyed to the investor and the distributor – Savills Vietnam.
Real estate investors in the coastal areas of Da Nang might not hear answers like this when they consider developing projects here, but they would do well to listen.
Investors, mostly from Hanoi and HCM City, flocked to the Da Nang area seven years ago with their projects in tow. They had convinced themselves that the broad sand banks and world-renowned beach were the ideal site for new resorts. At the time, Hanoi and HCM City were witnessing a “land fever”, with real estate prices escalating daily. Certainly, they reasoned, it was only a matter of time before that same fever attacked Da Nang as well, with hefty profits accruing to those savvy investors who foresaw the inevitable.
A lot of resort projects were kicked off at that time. However, to the surprise of many, the Da Nang real estate market did ultimately follow Hanoi and HCM City – when it froze.
Analysts assert that the investors made a big mistake when they surveyed the Da Nang market. They paid little heed to the fact that sun shines reliably only for a period of three months a year, while it rains during the other six months. In winter, those idyllic, “world-class” beaches look gloomy and deserted. And with strong winds and heavy rains, the idea of frolicking in the ocean or strolling outside to enjoy the landscape is not something that most people find appealing.
Some who bought apartments in the coastal areas have said they felt compelled to bargain those apartments away after only a year or so of living there. Their plans for romantic walks on the beach were thwarted by the realities of the weather, forcing them to stay at home, lock the doors, and ramp up the air conditioners.
Another big mistake by investors was that resort development surged so rapidly that infrastructure development in the locality could not keep up. An executive of CBRE Vietnam, which acted as a consultant to a number of projects, admitted that many apartment buyers were surprised when they saw nothing but white spread-out sand banks.
With no service providers in the areas, no local residents and no visitors, a lot of the coastal resorts in Da Nang now look like the deserted land. It is even difficult for many to go out and buy essential goods, given the dearth of markets or shopping malls.
Some experts estimate it will take 10 more years to develop the necessary infrastructure to create a good living environment in the area.
The hasty investments have resulted in the establishment of a series of coastal projects during the period of 2007-2009 which are now sitting idle.
Real estate investors are no longer welcomed by Da Nang’s people, who largely resent that the projects have encroached on public beaches. Meanwhile, people in some fishing villages complain that they have suffered from the local authorities’ plans to facilitate the urbanization of their areas.
vietnamnet
