Ho Chi Minh City’s apartment rental market has been hit hard by the COVID-19 outbreak despite some landlords reducing rentals. Vietnam’s Dau Tu (Investment) newspaper reported that many customers in her apartment building have stopped leasing condos since the pandemic broke out despite reduced rents.
Especially hard hit are Vietnamese who bought condominiums as investments, with plans to lease them out, rather than use them for their primary residence. Apartments in HCMC’s District 9 area, which previously fetched 10 ~ 11 million VND per month, are now renting for 7.5 million VND per month, but even with lower prices, there are few people rushing to rent these units.
For these investors, especially those who bought multiple units, the Covid-19 pandemic has led to major losses and many owners are struggling to have their banks refinance properties.
A broker in HCMC’s District 2 area who specializes in renting units in the Masteri complex said that 30% of foreign customers have prematurely cancelled their lease contracts though it meant losing the deposit. Some others are asking for rental cuts.
An owner in one of the Masteri buildings said that on his particular floor, nine out of ten apartments had been occupied in January, but now only four units have people living in them and the rest have been empty since March.
Nguyen Van Hau, General Director of property company, Asian Holdings, was quoted by Dau Tu as saying that many landlords are asking his company to help lease their condos, especially in the high-end segment as people cut down on spending due to the impact of the pandemic and opt for cheaper condos.
Analysts and brokers expect the situation to last until next year. Nguyen Thanh Tung, director of Sai Gon Xanh Company, also expected the condo leasing market to face challenges due to high supply. Nguyen said that since 2017, many projects have been completed, with 30% of buyers buying apartments to lease.
Nguyen Anh Tuan, director of Ha Do Group, said the difficulty would continue until 2021, since the economy is in trouble and many people have cut down on their spending, while foreigners would not come back to Viet Nam to work in 2020.
The HCM City Real Estate Association said that most of HCMC’s demand for high-end apartments, condominiums and houses was from foreigners, and so the market now faces a lack of demand since many foreigners have returned home due to the pandemic.