Weekly Vietnam Property News (17 – 23/07, 2020)
Hotel room rates in Ho Chi Minh City plummeted
According to Ho Chi Minh City Department of Tourism, the number of international visitors in the city in the first 6 months of 2020 decreased by 69% year on year to 1.3 million.
In the first half of 2020, revenue from accommodation and catering services decreased by 47% compared to the last 12 months, and travel revenue decreased by 71% year on year. After the social separation period, revenue from accommodation and catering services decreased by 48%, and tourism revenue decreased by 96%.
According to statistics, the total market of Ho Chi Minh City currently has 84 hotels providing about 12,400 rooms, the supply decreased by 23% compared to the same period last year due to many hotels temporarily closed in the past 6 months.
The market in the first 6 months of 2020 is the worst performance ever due to the blockade policy. Room occupancy decreased by 36 percentage points year-on-year to 32% while room rates fell 13% year-on-year to US $ 74 / room/night.
After Q1 was volatile, Q2 capacity only reached 12%, down 36 percentage points quarterly. The pressure from low occupancy led to a 21% decrease in average room rate by quarter. The 5-star segment is most heavily affected by dependence on international visitors.
Domestic tourists are “salvage” for real estate resort
According to Ho Chi Minh City Department of Tourism, the number of international visitors in the city in the first 6 months of 2020 decreased by 69% year on year to 1.3 million. In the first half of 2020, revenue from accommodation and catering services decreased by 47% year-on-year and travel tourism revenue decreased by 71% year on year.
After the social separation period in April, the second quarter recorded a 48% quarterly reduction for accommodation and catering services and a 96% quarter-on-quarter reduction for travel revenue. Domestic supply is the current potential demand. Ho Chi Minh City has about 8.1 million domestic visitors in the first 6 months, the highest in the country.
Hotels that depend on foreign tourists are struggling, the good news is that the catering service revenue has recovered. Domestic customers are bringing great benefits to the resort real estate market. The resort real estate market will probably continue to depend on the number of domestic tourists until the international flight recovers.
Asia-Pacific real estate plunged, Vietnam still maintained its performance
In the first half of 2020, the amount of investment and real estate rental prices in many Asia-Pacific countries plummeted. On the contrary, Vietnam has kept its upward momentum and maintained its trading activity.
The full impact of the Covid-19 pandemic on the real estate market in this region is increasingly heavy in the second quarter of 2020 with investment plummeting in most types of commercial assets, total volume. investment in the first half of the year in Asia – Pacific decreased 32% compared to the same period last year, of which the amount of investment in the second quarter decreased to 39% and the first quarter decreased by 26%.
Vietnam continues to hold its position as a favorite destination before the trend of moving factories. Although Covid-19 caused temporary difficulties for the company’s upcoming plans, with long-term investment strategy, industrial real estate in Vietnam still attracted investors. This contributes to creating a positive sentiment for investors in raising land prices despite the ongoing disease.
Industrial and logistics real estate is the rare market segment with the best resilience in the second quarter. Particularly in Vietnam, industrial zones in the southern provinces grew their rents by 9.7% over the same period last year. Rental rates for ready-built factories are still stable at US $ 3.5 – 5 / m2 / month, due to short-term contracts of 3-5 years and tenants are also susceptible to the impact of the pandemic.
Pave the way for the luxury real estate market
2020 is a challenging year for the real estate market due to the ongoing slow licensing and credit tightening. However, this is also an opportunity for investors who have a license to sell products. Along with that, the demand for high-class and luxury apartments continues to grow, coming from the rise of per capita income as well as the interest of foreign investors.
The number of super-rich people in Vietnam and their wealth has continued to increase over the past five years, since 2013 and is expected to continue to increase in the near future. Meanwhile, the revised Housing Law that allows foreigners to own houses in Vietnam has created demand for high-end real estate investments from neighboring countries.
Since 2015, when this policy came into effect, the proportion of foreigners owning real estate in many high-end projects has reached the highest limit, of which buyers are mainly from Taiwan and Hong Kong. and Korea. Demand for luxury housing products in Vietnam is expected to continue to grow thanks to the rise of the ultra-rich in Asia.
Notably, in the past few years, the luxury housing segment in Vietnam has increasingly attracted foreign investors because of its attractive profit. In the context of continued profit growth with high price increases and positive rental yields, the number of foreign investors and management units entering the luxury market will increase in Hanoi. like HCMC. These businesses will bring large capital inflows and introduce more new high-end real estate models to Vietnam’s housing market.
Compiled from many sources by LOOKOFFICE
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