Houses for occupation in high demand, shop houses have few takers

By Vu Le   May 23, 2023 | 02:30 am PT
Houses for occupation in high demand, shop houses have few takers
Street-front houses for lease on Le Loi street, District 1, HCMC. Photo by VnExpress/Quynh Tran
In HCMC, more than 65% of houses meant for occupation have been leased while street-front houses for businesses are largely vacant.

A VnExpress survey found this dichotomy with especially the lower-priced rental housing market being vibrant.

Houses costing less than VND3.5 million (US$149) and rented mainly by students and workers earning below VND12 million a month are 90-95% occupied.

The rent and occupancy rates are inversely related, with high-end housing coming in at 65%, the lowest rate but still considered positive for the segment.

Store-front houses in the city center, on the other hand, have few takers.

A tour of streets like Ngo Duc Ke, Ho Tung Mau, Nguyen Trai, and Bui Vien in District 1, once brimming with businesses, now reveals empty spaces. A similar sight can be witnessed near Notre Dame Cathedral and the City Post Office.

Recently eDiGi, an Apple Premium Reseller next to the Post Office, also closed shop. A few paces away, the space once occupied by a McDonald’s outlet still remains empty.

Street-front houses in the city center used to be highly sought after by big brands and small and medium enterprises, but are now unable to attract tenants.

Le Quoc Kien, a real estate analyst, said street-front houses used as offices or stores in central areas are suffering from low demand since the economy has taken a hit from inflation, war and global recession.

Businesses now prioritize cost cutting, and many have moved online to avoid fixed costs, he said.

Customers are also shifting online, he pointed out.

Owners of downtown street-front houses are usually wealthy and not dependent on rental incomes and often look down on bargaining, so much so that if asked to reduce rents they are likely to keep their property vacant, he said.

Owners of affordable houses are more open to negotiations and rents are already low, and so occupancy rates are high, he added.

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