illustrative image (Source: VNA) HCM City (VNA) - Many investors in HCM City are struggling to renttheir apartments as the market continues its tepid streak that began in early2016, according to the Dau Tu (Vietnam Investment Review) newspaper.
For example, the owner of a luxury apartment in District 1 is renting a unitfor 24 million VND (1,054 USD) per month, but he bought it for 4 billion VND.To attract tenants, the owner, Hung, has furnished it for 300 million VND.
“The apartment is fully furnished and has a nice location, but it has been onthe market for two months and only a few people have visited, and then theyleave,” Hùng, the owner, said.
Tran Thi Thuy is also renting an apartment in Chu Van An residential buildingin Binh Thanh district.
To lower rental costs, Thuy chose not tofurnish the apartment and set the price at 7 million VND per month. However, ithas been three months and the apartment has not attracted any tenants.
The townhouse segment in the city is also facing problems finding renters.
Tuan, for example, has had problems renting his three-storey house located on TruongQuoc Dung and Nguyen Van Troi streets in Phu Nhuan district. He has lowered therent to 50 million VND per month from 80 million VND.
Though the “for lease” sign has been hanging outside for four months, not oneperson has called, he said.
According to property website batdongsan.com.vn, rental prices for apartmentsin districts 2, 7, 9 and Binh Thanh have also declined.
For example, in Binh Thanh district, monthly rent in Vinhomes Central Park, SaigonPearl, Riverside, and Saigonland apartment buildings has been lowered by 2million VND - 5 million VND per apartment.
District 7, which has the highest occupancy level of all city districts, isalso experiencing a price slump.
In residential buildings like Phu Hoang Anh, Hung Phat, Hoang Anh Gia Lai andEra Town, a 60-70 sq.m apartment rents for 7 million VND - 10 million VND permonth, compared to 12 million VND -15 million VND last year.
Several high-end properties like Him Lam Riverside and Sunrise City are seeinga price drop in rentals as well.
Nguyen Huy Vu, head of BANVIETLAND Corporation, told Dau Tu that too manyapartment buildings had been built in the city and that investors who boughtapartments within the last eight years had been unable to resell them and arenow renting them.
With supply exceeding demand, the market has become even more competitive.
Vu Van Sang, a private homeowner who rents three apartments in Phu Nhuan and ThuDuc districts, said: “Part of the reason is that investors tend to buyapartments because of rental profit commitments made by housing developers. Butit’s the investor’s job to find tenants, not the developer’s.
“On the one hand, this is good because it makes the market more professional,but, on the other hand, it increases supply. Amateur investors like me cannotcompete with professional corporate players. No wonder the market is slumping.”
Sang said he planned to sell two of his apartments and find a new investment toget rid of the burden of his property loan.
Le Hoang Chau, Chairman of the HCM City Real Estate Association, said therental market would continue to face even tougher conditions because of theimbalance in supply and demand.
Property speculators typically buy luxury apartments to rent, but mostVietnamese residents cannot afford them, while demand from expatriates livingin the city is not high, he said.
The uncontrolled purchases of apartments and investors’ unrealisticexpectations of the market have adversely affected the rental and propertymarket, he added.
“Just look at residential buildings at night. How many apartments have lightson and how many don’t? The reality is that many residential apartments boughtby buy-to-let investors are not occupied,” Chau said.-VNA
VNA
