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House rental prices plummeted during the new epidemic

Avatar of Nick John By Nick John Dec8,2023 #House #plummeted
House rental prices plummeted during the new epidemic 5
House rental prices plummeted during the new epidemic 5

Ms. Minh said there are 2 luxury apartments located in District 2, East Saigon, rented by foreign experts with contracts signed every 12 months through a service company in Ho Chi Minh City managed.

During the first wave of Covid-19, when the whole country applied social distancing policies in April, Ms. Minh adjusted the rent from 1,300 USD per month to 1,100 USD to support guests.

If including the two reductions, Ms. Minh’s revenue from her two apartments lost 800 USD per month (equivalent to a monthly loss of 18.5 million VND).

Not only are high-end apartments for rent having difficulty during the pandemic and have to lower prices, even mid-range, affordable apartments and townhouses are also facing strong pressure to reduce prices.

When faced with the first wave of the epidemic, Mr. Trieu reduced rent for guests by 15% and the latest reduction started in August with another 10%.

Ho Chi Minh City apartment market.

While the East and South areas of Ho Chi Minh City both have a situation where house rents are going down, in District 4, an area only a few minutes away from the central core of District 1, the market is equally gloomy.

At the end of March, the rental price adjustment in District 4 only stopped at 5-10%.

Mr. Tai is concerned that as long as foreign tourists cannot enter Vietnam, the rental housing market, especially high-end apartments, will continue to stagnate and fall in price.

Mr. Tran Hoai Linh, General Director of VNO Group, said that the rental housing market is being negatively impacted by the second wave of Covid-19 with two specific manifestations: price reduction and lack of customers.

According to VNO’s survey, demand for high-end housing is low because the number of foreign experts cannot come to Vietnam.

Mr. Linh assessed that all rental housing segments are adjusting to new price levels that are 20-35% lower depending on location compared to 2019. This is the fastest and strongest price reduction cycle in real estate.

The General Director of VNO Group added that even since the new wave of Covid-19 appeared, renters’ psychology has become more cautious and it is more difficult to find tenants to fill vacancies than before.

Talking with VnExpress at the announcement of the Ho Chi Minh City real estate market report for the second quarter, Mr. Vo Huynh Tuan Kiet, Director of CBRE Vietnam housing department, said that rental house prices decreased due to the impact of the pandemic.

Mr. Kiet predicted that this market’s difficult situation may continue for a long time because it depends on the evolution of the domestic and global epidemic situation.

However, this expert believes that the reason why most landlords with rental apartments can still accept rent reductions is because they still recover some of the lost cash flow.

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