Rental property investors have been selling off apartments in the past few years and switching to other assets as Covid-19 hit demand and dragged down returns.
Son, an experienced investor, spent VND5 billion (US$217,600) in 2019 on buying two apartments in HCMC’s former District 9 (now Thu Duc City) to lease out.
He was confident in the beginning since he was earning VND18 million a month in rent and prices were still appreciating quickly.
But a few months later Covid hit and dragged the rental market to a near halt.
He lowered his rents to VND6.5-7 million a month but could still not find lessees, and had to leave the apartments vacant for most of 2021.
He put them up for sale in October 2021, and it took nearly half a year.
Son said he only made a profit of VND250 million on the sales.
Apartments in HCMC’s Thu Duc City. Photo by VnExpress/Quynh Tran
Thy, another investor in HCMC, has sold four apartments in District 7 and Nha Be District since 2021 as their yields were low.
Apartment rental prices started to fall in 2019 and nosedived in 2020-21, she said.
They have showed signs of recovery this year but rents remained sluggish, resulting in a yield of only 4 percent, she said.
The rate barely bear inflation, and the price appreciation was only 10 percent a year, while independent houses and lands appreciated by 30-40 percent, she said.
Property consultant Le Quoc Kien said the rental apartment market took off in 2010-12 and peaked in 2017-18, when there was a boom in apartment supply.
The yield used to be around 6 percent in 2010- 15, and due to the limited supply then, investors could resell their apartments at a big profit.
But the market cooled down by 2018, when the prices of new apartments surged by 25-75 percent to VND50-60 million a square meter while rents and secondary market prices only rose marginally.
Investors usually had to renovate their apartments after five years, which caused a further dent in profits, he said.
The pandemic was just “the last straw” that drove investors out of the market, he added.
- Reduce Hair Loss with PURA D’OR Gold Label Shampoo
- Castor Oil Has Made a “Huge” Difference With Hair and Brow Growth
- Excessive hair loss in men: Signs of illness that cannot be subjective
- Dịch Vụ SEO Website ở Los Angeles, CA: đưa trang web doanh nghiệp bạn lên top Google