The Real Estate Market in Da Nang is Making a Comeback

In late June 2024, the National Assembly passed a resolution on the organization of urban administration and piloted several mechanisms and special policies for the development of Danang City. The National Assembly also agreed to establish the Danang Free Trade Area. This model is not new to the world, but it is a first for Vietnam.

Along with this information, the Danang real estate market has received positive developments.  DKRA Group’s report on the Danang apartment market in Q2 2024 indicates that there were 16 projects launched with 2,484 apartments during the quarter, a 2.5-fold increase compared to the same period last year. Notably, the successful absorption rate reached 1,301 units, a 30-fold increase compared to the previous year. Especially, this segment increased in both sales volume and successful transactions compared to Q1/2024. Prices ranged from 26 to 160 million VND/sqm.

Data from Batdongsan.com.vn for Q2 2024 also showed that the number of searches for real estate for sale in Danang increased by 44% compared to the previous quarter and surpassed the 2023 peak. Meanwhile, the average asking price for real estate in Danang set a new record. This can be explained by the presence of many luxury apartment projects in the past, which pushed up the average price.

According to this unit, the market situation for all types of real estate in Danang has increased. However, apartments showed more remarkable growth. Specifically, the number of apartment listings in Danang in Q2 2024 increased by 56% compared to Q1 2024, and the level of interest and asking prices also increased by 39% and 14%, respectively. According to a survey of real estate brokers, 55% believed that the Danang apartment market is gradually recovering, and 27% thought that this type of property is growing strongly.

In terms of demand, the trend of buying apartments in Danang for flipping has decreased compared to buying for owner-occupation and renting. Specifically, 64% of brokers surveyed believed that flipping has decreased compared to before, and more than 50% thought that the demand for buying for owner-occupation and investment is increasing.

Also, according to a survey by Batdongsan.com.vn, among those searching for apartments in Danang, only 28% are locals, while the rest are from other areas. In contrast, the proportion of local buyers for land and private houses is between 40-42%, reflecting the high demand for owner-occupied properties by local residents.

In reality, the Danang real estate market is currently experiencing positive shifts in various segments. At the same time, the city’s efforts to attract foreign investment (FDI) have also created a foundation for the local real estate market.

According to the Danang Department of Planning and Investment, from the beginning of the year until July 30, Danang attracted FDI worth 29.835 million USD, an increase of 8.18% compared to the same period last year. There were 44 new projects with newly registered capital of 24.106 million USD, up 131.19% compared to the same period in 2023 (in 2023, there were 71 new projects with registered capital of 10.427 million USD);

At the launch event of the task force to promote cooperation between Danang and the US in June 2024, Mr. Ho Ky Minh, Vice Chairman of the Danang People’s Committee, said that there are currently 82 projects by American investors in Danang with a total investment of over 831 million USD, accounting for 8% of the number of projects and more than 19% of total foreign investment in the city.

At the same time, the US ranks third among 45 countries and territories investing in Danang, mainly in the fields of tourism, real estate and hotels, high technology, and auxiliary industries.

In addition, American non-governmental organizations are funding nine projects in Danang. Some of these projects include: “The Urban District of Son Tra Program” funded by World Vision International with a budget of 45 billion VND (2020-2022); and the “Building a Healthy City” project funded by East Meets West Foundation with a budget of over 9.4 billion VND.

Mr. Minh also said that in the past, Danang mostly had land or apartment projects, but now, the city’s real estate landscape has changed with the presence of world-class resorts. These projects also create significant value for tourism, attracting domestic and international visitors to Danang. With its existing foundations in tourism and infrastructure, Danang will continue to be a leading destination in the region and the world.

For instance, the recent launch of the Nobu Danang project along My Khe beach has attracted much attention. This project is the first to be officially announced by the White House and the second to be shared directly by the US Consul General in Vietnam. The project stands out due to its iconic location and is the result of a collaboration between Nobu Hospitality and Vietnamese real estate developer VCRE, encompassing two projects: Nobu Danang and Nobu Saigon. Notably, Nobu Danang is poised to become a symbol of the city, serving as a complex of hotels, restaurants, and branded apartments, marking the first Nobu-branded project in Vietnam and Southeast Asia.

Mr. Trevor Horwell, CEO of Nobu Hospitality, shared that the choice of Vietnam, particularly Danang, as their first destination in Southeast Asia, was largely due to the market’s potential. Danang is an ideal springboard for their strategic expansion in the region, given the city’s appeal as a global tourist destination. If compared to South Korea or Thailand, which have already established themselves in the Asian service industry, Vietnam is considered a market with ample room for growth.

Founded in 1994 by renowned chef Nobu Matsuhisa, superstar Robert De Niro, and veteran film producer Meir Teper, Nobu has earned a reputation as a “global icon of luxurious lifestyle” and a favorite haunt of international celebrities. In June 2024, the three illustrious co-founders of Nobu Hospitality graced Vietnam with their presence, participating in an exclusive series of events hosted by VCRE. Attending the event, Ms. Susan Burns, Consul General of the United States in Ho Chi Minh City, extended her congratulations to the two companies, highlighting the exciting business venture of an American brand in Vietnam, a dynamic and burgeoning market brimming with opportunities.

VCRE representatives shared that beyond cultural exchange, partnering with a globally renowned brand like Nobu can help attract international attention and bolster the image of both countries on the world stage, particularly in terms of investment and business. Moreover, Nobu’s presence is expected to boost Vietnam’s tourism industry and elevate service standards, as Nobu typically attracts international travelers and upscale clientele who demand exceptional quality.

In recent years, Danang has tirelessly worked to become one of the most attractive destinations for international investors.

The city is actively promoting investment in high-tech industries, aiming to develop electronics, electromechanics, automation, precision mechanics, biotechnology, information technology, semiconductor industry, artificial intelligence, and tourism real estate…

Moreover, the new Laws that came into effect on August 1 are expected to bring about positive changes to the Danang market in the coming time.

However, according to experts, in addition to individual housing and existing land plots, Danang needs to develop premium urban areas with high-quality infrastructure to cater to a new group of customers, including experts and entrepreneurs who plan to live and work in the city for the long term.