HCMC apartment rents continue to fall amidst pandemic

A Q2 VnExpress survey found that apartment rents in HCMC were continuing to fall despite a 30 percent slump last year.

Since May, when the new Covid-19 wave in HCMC turned complicated, luxury apartment rents in District 2 that typically ranged from $1,300-1500 a month dropped to $1,000 and even $900.

In District 9, many fully furnished two-bedroom apartments have reduced rent from $430 to $280 a month for tenants facing financial difficulties during the pandemic. Districts 2 and 9 are now part of Thu Duc City.

In Binh Thanh District, fully serviced luxury apartments with areas of up to 80 square meters that had a daily rent of $43 have seen this plunge by up to 35 percent since the new Covid-19 wave struck.

A few minutes away from the center, District 4 used to be a bustling market for rental apartments, but, since the new Covid-19 wave, the rent for luxury apartments here have recorded the strongest dip in a decade. In 2020, rents of luxury apartments on Ben Van Don Street dropped by 30-35 percent and have dropped another 10 percent this June.

In the southern area of the city, a fully furnished mid-range apartment with an area of 75 square meters and two bedrooms had an average rent of $516-559 a month before the pandemic. This has dropped to $344-387.

Alongside the fall in rents, demand for apartment rentals is also low while supply is increasing. The HCMC Real Estate Association said that in the second quarter, many tenants of high-end apartments closed their leases early because of the pandemic.

Trang Minh Ha, chairman of consulting firm North Star Asia said that apartment rents have been falling since 2020 and the latest outbreak is making the situation worse. The pandemic has caused difficulties for many people, reduced their income and forced them to cut spending, he said, adding that these factors have affected the real estate rental market strongly.

Ha said that in May and June, many landlords have reduced the rents by 10-20 percent. Compared to the first six months of 2020, the rental housing market has performed worse after many people returned their rented houses because of financial difficulties.

He said that development of the market in the next few months would depend on the pandemic situation and the vaccination campaign.

However, in the short term, the rents might fall further due to a decrease in demand and rising supply, he added.