As a result of the resurgence of the Covid-19 virus in Vietnam, landlords across the country have been forced to lower rents again, after a big drop in real estate prices during the first Covid-19 web that hit Vietnam in the spring.
Ho Chi Minh City landlords have been especially hard-hit since many real state developments cater to foreigners. One landlord said that the rate for an apartment in District 1 had been $1,300 USD per month in January, then lowered to $1,100 USD per month in April and has now been lowered to $900 USD in August. The landlord said that, "The longer the pandemic goes on, the more damage it will cause to me because I have bank debts to pay."
Another landlord, in District 7, which also has many apartments and condominiums that cater to foreigners had cut rates by 15% during the first wave in the spring and has now had to cut rates by an additional 10% this month.
A real estate broker who specializes on units in the District 4 area said rents in that area have dropped by 30 ~ 35% since the beginning of the year, since many of the people who had previously rented properties in this area were businessmen with short-term needs or tourists who were staying in HCMC for several months, or longer.
Most real estate industry executives say that rents will continue to fall to even lower levels until both foreign business people and tourists are allowed to enter the country. Most of these executives also believe that foreigners will not be able to enter the country until sometime early next year and they expect rates to fall by another 5 ~ 10% in the interim.
This news is especially troubling for many Vietnamese who have bought apartments and condos for investment purposes, with many of these people having monthly mortgage payments, which they are unable to meet in the present climate.
Tran Hoai Linh, CEO of VNO Real Estate Group, said the second wave of Covid-19 has resulted in less demand and that rental prices would continue to fall as long as foreigners are prohibited from entering Vietnam.
Linh said that rents in all segments have seen drops of 20 ~ 35% from last year, the biggest fall in a decade. He added that landlords with apartments costing 15 million VND ($647 USD) a month or more are having the most trouble in finding tenants, and that units that are priced $1,000 USD per month have no takers.
Another trend is that many local Vietnamese are moving high-priced apartments for apartments that are priced less and also locking in multi-year contracts with landlords so they can make sure that rents don’t increase dramatically in the future.