Analysts once claimed that luxury resort villas worth millions of dollars would sell like hot cakes. Recent surveys suggest that their affordability is not high in Vietnam. So who will buy them?

Cushman & Wakefield, an international real estate consultant firm that has surveyed the resort real estate market, maintained that the market has been developing strongly in all of Southeast Asia, including Vietnam.

According to the firm, however, not many luxury resorts with villas worth millions of dollars in Vietnam have services with international standards. Besides, the price far exceeds their real value as well as the affordability of investors.

A survey conducted by CBRE, a real estate service provider, also confirmed that the annual income of potential clients is not high if compared to the overly high value of the products launched onto the market.

According to CBRE, besides personal income, the money of resort real estate investors come from different sources, including inheritance. Only a few clients have been interested in investment deals worth more than $300,000. Thirty-two percent of surveyed investors admitted that they can only afford villas priced at $200-300,000, while 61 percent can only pay under $200,000.

The majority of clients also need financial support at 30-70 percent.

As for foreign investors, the ability to afford multi-million dollar villas is also not as high as expected.

An extensive survey conducted by Vinaconex-ITC, an investment and tourism promotion company, showed that while domestic investors want resort real estate for investment purposes, foreign clients buy real estate for entertainment.

CBRE shares the same view, saying that only 8.7 percent of total individual clients with high incomes in Hanoi and HCM City would purchase resort real estate for fun, while the majority would buy the real estate as an investment.

Like domestic investors, the annual income of foreign investors is relatively high at $60,000-84,000, but only half have demand and can afford villas priced at $300-400,000, while 27 percent can afford villas priced at $200-300,000.

The ‘big guys’ who purchase resort real estate in Vietnam are becoming younger, with 46 percent of buyers and potential clients aged between 35 and 44, while 35 percent are aged 45-54.

Rol.vn - Source: Vietnam Net