Despite the impact from Covid-19, luxury real estate recorded a growth of 230% globally, according to Savills World Research.
Currently, the global supply of luxury real estate is 580 projects. This number is forecast to double by 2026 with 900 projects. Vietnam and Mexico are leading the upper-upscale segment, which is also the segment recording the strongest growth in the world.
According to Savills, there are 3 factors that will affect the value and price difference of luxury real estate.
The first is the location of the project. This is considered a prerequisite factor affecting the price of this market segment. In the 20 most developed markets, 13 locations in emerging resorts or project areas have received both luxury and non-luxury brands.
The price difference in resorts is about 25% and drops to 18% in developed cities. Da Nang is in the top 20 cities for luxury real estate with a future supply growth of up to 57% from current projects.
Mr. Matthew Powell, Director of Savills Hanoi, said that projects located in different locations will have distinct characteristics. Therefore, the scale for branded real estate will also be more diverse. From an investment perspective, these factors contribute to bringing outstanding advantages to the luxury real estate market, helping to attract buyers and increase competition in the market.
The second is the service quality standard associated with the brand reputation. the owner, the owner will be assured of a professional and high-class management method and operated according to a carefully researched process.
Research by Savills shows that the average price difference between branded and non-branded properties is 29%. For emerging markets, the figure is 44%. Meanwhile, new areas with fewer luxury real estate projects recorded double the price difference between the two types of real estate.
According to Savills, the potential of this field in the Vietnamese market lies mainly in foreign customers because these customers who are familiar with brands and tend to choose this type of product.
The final factor affects the value of luxury real estate is the utility that the investor provides. Research shows that the diversity of utilities is directly proportional to the location of the project. Luxury brands that provide a full range of utilities are present in the market, while mid-end brands only meet 60%.
Front office, security, fitness center, spa and swimming pool are considered basic services that luxury properties must provide. On the other hand, amenities such as beauty treatments, home cuisine, golf courses, or Michelin-starred restaurants are premium services and are often associated with top brands.
In addition, highly personalized service is a prominent feature of luxury real estate. Basic services can be developed into specialized services or “on-demand services” ranging from house cleaning, private dining to pet care.
According to Savills, Covid-19 has changed the psychology and needs of buyers, focusing on properties with large areas, private outdoor areas and healthcare facilities. old, the world's luxury real estate is increasing in number and diversity with health-related services, accounting for 21% of services for users. In addition to standard health care services such as fitness centers and swimming pools, luxury real estate projects are seeing the rise of a wider variety of health facilities such as spas, saunas, spa treatments, and more. Whether.
On the other hand, buyers are also more interested in utilities for the trend of working from home. According to a report by Savills, high-speed internet is the most important convenience for buyers of luxury real estate.
For the investor, besides the design standards coming from the brand, the number of customers of the luxury real estate is expanded to those who are interested in that brand.
Another notable point is that the market has witnessed a diversification in terms of participating brands over the past decade. Previously, hotel brands accounted for the majority of the market share, but now, lifestyle brands have also entered the market.
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