Vietnam is facing an oversupply in its market for coastline resort properties.
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| Developers have bought nearly all the coastline land in prime areas with good infrastructure like Da Nang. |
CB Richard Ellis Vietnam recently found in research that the country will have 55 resort property projects with a total of 5,318 villas and 6,601 apartments by the end of 2010. This has caused the Ministry of Planning and Investment to request that local authorities check on resort developments in their jurisdictions and report back to the ministry. The move has been interpreted by the public as being a warning about the excess number of projects, according to website VietNamNet Bridge.
Demand for resort properties in Vietnam has been driven recently by locals buying second homes.
Phuket – as an example of a more mature resort market in Asia – has 5,624 resort villas and apartments, while Vietnam’s central region alone has 3,745. A CBRE expert said that Vietnamese developers have been sacrificing quality for quantity and building too many units without paying much attention to strength of construction.
An official from the Ministry of Planning and Investment said that Vietnam is nearly running out of land along its coastline, especially in localities with good infrastructure like Da Nang and Binh Thuan. In the past, officials may have rushed to allocate good plots to investors for development without considering the capabilities of the developers. Current regulations dictate that developers must only obtain permission from the government to build a resort if their plot of land is over two hectares – thus the seaside land has been divided into small plots unfortunately.
