Editor: Cheyenne Hollis
Dot Property Blog June 2020
The Vietnam tourism property market is still relatively new, but it is a segment many experts have pointed to as having the potential for strong development. That’s due to rising foreign and domestic tourism alongside a growing number of appealing holiday destinations. Prior to the COVID-19 outbreak, nearly two million foreign tourists visited the country in January with more than half of this total coming from China, South Korea, and Japan. According to Kenneth Atkinson, Founder and Senior Board Advisor at Grant Thornton Vietnam, foreign homeowners could be a major factor in sustaining the tourism market over the long term. He told the Vietnam Investment Review that the country has a rather low portion of returning visitors when compared to Thailand which has a return rate for arrivals that sits closer to 70 percent. With more foreign buyers being drawn to holiday homes in Vietnam’s tourist areas, he could be set to rise in the coming years. Market experts also expect to see a rise in the number of branded residences as the interest from more affluent buyers remains high. Vietnam currently has the third-highest number of projects in the pipeline to meet their demand. Overseas investors are attracted to the Vietnam tourism property market due to the high yields that come with properties offering flexible usage for holidays. See more: Awarding winning resorts and beachfront developments drive Vietnam’s tourism boom“Rental yields on city properties remain decent at 6-8 percent in the better developments and many developers in the coastal resort areas have attracted buyers with high guaranteed returns of 8-10 percent for 10 years, although it is expected that these will fall back on default values over the coming months, not only because of the impact of COVID-19,” Atkinson explains. “In total, however, rental yields in Vietnam are significantly higher than say in Bangkok and other parts of Thailand, and Singapore.” Next steps for growth in Vietnam tourism property market key driver of the Vietnam tourism property market will be infrastructure in resort destinations. There has been some tourism infrastructure developed in popular locations like Da Nang. And while this has allowed for the development of international-standard projects in some locations, the Vietnam tourism property market has room for future growth.