The HCM City apartment lease market has been hit hard by the COVID-19 outbreak despite landlords reducing rentals, experts said.

Dau Tu (Investment) newspaper reported a person living in District 9 as saying that many customers in her apartment building have stopped hiring condos since the pandemic broke out despite reduced rents.

Her own fully furnished two-bedroom unit is now leased out for a VND7.5 million (US$329) a month as against VND10-11 million ($438-482) last year.

Vo Van Tuan bought an apartment with a bank loan of VND1 billion ($44,000), and is currently struggling to pay the interest since he cannot lease it out.

Tran Mai Tran leases condos and subleases them, and was earning VND5-8 million ($219-350) on each before the pandemic.

Seeing this, she went on to rent 10 more but now faces losses.

Many of her lessees have opted not to renew their leases though she cut rents, she told the newspaper.

A broker in a modern urban area in the city told Viet Nam News that 30 per cent of foreign customers have prematurely cancelled their lease contracts though it meant losing the deposit. Some others are asking for rental cuts.

She said: “It was difficult to find vacant condos in the past. The situation now is totally different.”

The problem exists in both high-end and medium segments, she said.

Nguyen Van Hau, general director of Asian Holding, was quoted by Dau tu as saying that many landlords are asking his company to help lease their condos, especially in the high-end segment as people cut down on spending due to the impact of the pandemic and opt for cheaper condos.

Analysts and brokers expect the situation to last until next year.

The broker told Viet Nam News: “It cannot recover within six months.”

Nguyen Thanh Tung, director of Sai Gon Xanh Company, also expected the condo leasing market to face challenges due to high supply.

Since 2017, many projects have been completed, with 30 per cent of buyers buying them to lease, he said.

Nguyen Anh Tuan, director of Ha Do Group, said the difficulty would continue until 2021.

The economy is in trouble and many people have cut down on their spending, while foreigners would not come back to Viet Nam to work in 2020, he explained.

The HCM City Real Estate Association said demand for high-end condos was from foreigners, and so the market now faces a lack of demand since many foreigners have returned home due to the pandemic.

It did not say when it expected a return to normalcy. VNS