Condotel prices stay elevated despite demand plunge

Sales on the primary market (in which developers sell directly to buyers) was only one-third of 2022, according to a report by property consultancy DKRA Group.

Half of condotel projects recorded no sales, it added.

In Da Nang and nearby, which is the area with the biggest number of condotel projects, sales hit a 10-year low, equivalent to 3% of 2022 figures.

Only 13 condotels were sold there last year out of 690 that were up for sale.

Only four out of 45 condotel projects launched new units last year. The segment’s supply dropped by 3% from 2022.

Major localities with high supply such as Quang Ninh in the north, Quang Nam, BinhDinh and KhanhHoa in the central and Ba Ria – Vung Tau in the south saw sales declining by between 7% and 22% from 2022.

The accumulated supply of condotels was at 50,000 units by the end of the year.

Prices, however, remained high. Each square meter cost up to VND155 million in the south, and VND124 million in the central and north.

Projects had discounts of 10-15% in Da Nang and nearby areas.

Pham Thi Mien, deputy head of the market research unit at Vietnam Association of Realtors, said that condotel sales dropped due to challenges in acquiring permits.

Vo Hong Thang, director of project consultancy and development at DKRA, said that the lack of a legal framework for condotels was the main reason buyers had low confidence and demand for the products.

Developers, however, kept prices high because they had invested large sums into the projects aimed at high-spending customers, he said.

As a strong rebound in the economy is yet to be seen, and tourism revenues are yet to reach breakthroughs, the condotel market is expected to take five to seven years to improve, he added.