The investors, who believed that resort real
estate, unlike other property market segments, would never fall into decay,
have changed their thoughts and tried to run away from the market.
By the
end of December 2011, the Binh Thuan provincial authorities had revoked the
licenses of 165 real estate projects due to the investors' delay in
implementing the projects, including some huge ones.
Truong
Quang Tuan, an investor from Hanoi, registered to buy a villa at Ocean Villas
Da Nang project. It was estimated that the total sum of money he had to pay to
the project developer reached 11.5 billion dong.
However,
Tuan has decided to sell the villa at a loss, because he needs money right now
for other investment deals. The ad piece posted by Tuan on Internet says the
sale price is 10.2 billion dong, but Tuan has revealed that the final price
would be "negotiable."
Another
reason behind Tuan's decision is that he fears he would not make profits from
leasing the villa to other people.
"It's
still unclear about the possibility of leasing the villa. Meanwhile, in the
immediate time, I would have to spend 600 million dong on interior decoration
and pay annual management fees," Tuan said. "Therefore, I'd rather
sell the villa and seek other investment opportunities."
Not
only Tuan, other resort real estate developers have admitted that they were too
optimistic about the resort real estate market. The investors believed that the
resort real estate market segment would not bear the same fate like other
market segments, because this market segment targets rich people, who stay safe
from the economic crisis.
In
2010, the developer of a resort real estate project in Vung Tau City, when
answering the interview to Nhip cau Dau tu newspaper, affirmed that in the
economic downturn, resort real estate projects would still "live
well", because the investors expect to make profits from re-leasing villas
to tourists and other clients.
However,
the same developer has revealed that he has just sold 50 percent of the
project's products, even though he spent a lot of money on marketing campaigns.
In
2008-2009, a lot of resort real estate projects were "drawn up" by
investors. At that time, some real estate consultancy firms predicted a new
wave of the investment in the resort real estate sector.
However,
the forecast has not come true, and the economic crisis has made a lot of the
projects remain on paper forever.
In the
last two years, a lot of resort real estate project developers have "fled
for their life". A lot of big projects, registered by both foreign and
domestic investors, have been taken back by the local authorities.
Bai
Bien Rong project by Dragon Beach Group in Quang Nam province once caught the
special attention when it was introduced with the huge investment capital of
4.15 billion dollars. However, the project never comes true because the Quang
Nam provincial people's committee revoked the investment license in late 2010
after the investor refused to make a deposit and did not take any move to carry
out the project.
The
US$1.3 billion Vungtau Wonderful World Theme Park project developed by Good
Choice USA-Vietnam may follow Bai Bien Rong's footsteps and see the license
revoked in the near future.
According
to the Ba Ria - Vung Tau provincial planning and investment department, the
department has sent a document to the investor's registered address in the US
to inform about the decision to withdraw the license of the project because the
investor did not carry out the project.
It is
estimated that only 15 percent of the products at resort real estate projects
have been sold to foreigners, while the other 85 percent are Vietnamese people,
who have realised that it's not easy to earn money from resort real estate
investment as previously thought.
VietBiz24
Business & Investment Opportunities
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