Da Nang Real Estate Market Records Recovery in H1 | Company

A view of the pool at Da Nang-Mikazuki Spa and Resort, the first five-star resort and entertainment resort in Da Nang Bay. (Photo courtesy of Mikazuki Group)

Da Nang (VNS/VNA) – In the opening period of 2022, the central city of Da Nang is recovering by focusing more on brand tourism real estate projects. In addition, Da Nang continues to develop smart urban areas
with the ambition to put the city on the map of a high class life and
urban resort area.

For the first half of 2022, the city welcomed a total of 1.33 million tourist arrivals served by established accommodations, up 26% year-on-year.

The number of MICE guests registered in February and May increased eightfold compared to the previous year.

In the first half of 2022, there were two new properties, Radisson Hotel Da Nang (182 rooms) and Mikazuki Da Nang (294 rooms).

Da Nang’s four- and five-star hotel market had 81 projects with 15,343 rooms. The number of 5-star and 4-star rooms represented 38% and 62% respectively.

For the first six months of 2022, in Da Nang, the ADR (Average Daily Rate) averaged USD 70 per room per night, up 11% year-on-year and the occupancy rate was 26, 3%, up 15%.

The city plans to welcome 10 new properties with 2,442 rooms, bringing the total supply to 91 properties with nearly 18,000 rooms for the remainder of 2022.

By 2022, the ADR is expected to increase by 30% year on year, to 79 USD/room/night, and the occupancy rate would be 53.2%, up from 43.5% year on year.

By 2024, the city’s four- and five-star hotel market is expected to have 99 properties with more than 21,000 rooms. The greater number of brand projects improves the performance of the high-end hotel market. Thereafter, ADR is expected to increase at 2021 Compound Annual Growth Rate (CAGR) through H1 2024 of 25% per annum, possibly reaching USD 119/room/night in 2024. Occupancy will rebound to a low pre-pandemic by 63%.

Holiday real estate market

In the first half of 2022, there was only one newly launched condotel project: Felicia Da Nang (70 units launched in the first phase). Currently, the city has a total of 7,384 condotel units (from 16 projects) and 2,522 vacation villas (from 13 projects).

Over the past three years, Da Nang’s condotel market has had few projects open for sale. Consequently, the primary price has been hovering at the 2019-21 CAGR of 4% per annum and currently stands at USD 2,431 per square meter. The cumulative sell-through rate was reported at almost 85%.

The holiday villa segment recorded no new offers during the same reference period. The primary price remained unchanged and averaged 2,724 USD per square meter.

For the first half of 2022, no newly launched project is recorded. Currently, Da Nang has a total of 7,378 condominium units spread over 20 projects.

Several projects were introduced during the 2020-2021 period, even during the pandemic. The market-wide primary price averaged USD 1,475 per square meter and grew at a 2019 to 2021 CAGR of 8% per annum.

Primary prices currently stood at $2,100, $1,300, and $650 per square meter for the high-end, mid-range, and affordable segments. High-end products rose to the highest, with a CAGR in 2019-2021 of 6% per annum, mainly thanks to two projects, The 6Nature and The Sang Residence sold at a relatively high price range compared to those of ranking similar in the city.

Meanwhile, the primary price of the mid-range segment fell slightly, as FPT Plaza 2 offered 700 units for sale at a much lower price than the same peers.

In the coming times, the condominium market in Da Nang is expected to boom, with 10 new projects to be launched, providing an additional 5,600 units.

Luxury apartments will take the lead, driving market-wide primary price growth at a CAGR in 2021-24 of 12% per annum.

In the first six months of 2022, the city launched Sunneva Island for the first time in the second quarter, with 106 units including villas and townhouses.

The remaining phase of Regal Pavillion contributed 34 shophouses to the overall supply. Currently, the city’s land market has 1,624 units (villas, townhouses, businesses).

During the period 2019 – 2021 there was no new supply of villas and townhouses; therefore, market-wide primary prices remained virtually unchanged, reported at US$3,300 and US$3,450 per square meter of land.

Recent launches from Sunneva Island in the first half of this year pushed the price range to $3,780 for villas and $3,900 per square meter for townhouses. Regal Pavillion was first introduced last year and sold for over US$6,500 per square meter, leading to a doubling of the primary price across the entire market for the retail segment during the period. 2019-2021./.

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