Will short-term rentals in apartment buildings in Ho Chi Minh City decrease?

(Dan Tri Newspaper) - Experts believe that the ban will affect the market for apartments in the city center, particularly in the mid-to-high-end segment. Apartment prices and rental rates will be affected in the short term.

Apartments for short-term rental are booming.

Working in the event organizing industry and often having long business trips to Ho Chi Minh City, Ms. Nguyen Ha ( Hanoi ) chooses to rent an apartment for short stays.

She said that apartment living offers conveniences such as spaciousness, the ability to accommodate many people, cooking together, and a comfortable lifestyle like at home. In particular, the rent for an apartment is cheaper than other traditional types of accommodation, saving costs for the company, especially since they often travel in groups and stay for extended periods.

Recognizing the needs of customers like Ms. Ha, the market for short-term apartment rentals in Ho Chi Minh City has boomed in recent years. These booming service areas are typically located in central locations with convenient transportation, and the apartments are in the mid-range to high-end segment, concentrated in areas such as District 1, District 4, and Binh Thanh District.

However, along with that, renting out apartments also causes many negative consequences affecting the security of the apartment building and the lives of residents within the complex. Ms. Minh Thuy, a resident in a project in District 4 (Ho Chi Minh City), complained that the apartment next door, which is rented out for short stays, is always noisy and residents come and go early.

The constant coming and going of tenants, littering indiscriminately, and drunken shouting in the hallway have made it unacceptable for her and other families on the same floor. Despite having complained to the building management, the situation has not improved.

A few days ago, Ho Chi Minh City issued a regulation prohibiting the use of apartment units for short-term accommodation businesses. Ms. Thuy said that she and other residents were very happy about this.

Ho Chi Minh City bans short-term rental services in apartment buildings (Photo: Trinh Nguyen).

A survey conducted by reporters from Dan Tri newspaper reveals that apartments intended for residential use but also being used for short-term accommodation services is common in Ho Chi Minh City. Rental prices vary widely, from 500,000 VND/day to 1-2 million VND/day, depending on the size and location of the project.

In District 4, along Van Don Wharf, dozens of apartment buildings offer this service for rent. In Binh Thanh District, the urban area on Nguyen Huu Canh Street has a huge number of apartments, so the supply for short-term rentals is also high. Similarly, a several-hundred-hectare urban area in the former District 9 (now Thu Duc City) also has a boom in short-term apartment rentals.

A resident of the urban area on Nguyen Huu Canh Street (Binh Thanh District) stated that out of 600 apartments in the block, approximately 350 are for residential use. According to the registration information, of the 160 apartments available for rent, only 20% are for long-term rentals, while 80% are for short-term stays. It is known that this urban area has dozens of blocks.

Multidimensional impact on multiple target groups.

Experts agree with Ho Chi Minh City's ban on using apartment units for short-term accommodation businesses.

Responding to a reporter from Dan Tri newspaper, Mr. Vo Hong Thang - Deputy General Director of DKRA Group - stated that this decision is reasonable because the 2023 Housing Law clearly stipulates that apartment buildings are for residential purposes only and cannot be used for other purposes. Furthermore, it ensures a better living environment for residents, guarantees security, reduces social vices, and ensures fire safety.

Assessing the impact of the regulations on the real estate market, Mr. Thang said that the management boards of many apartment buildings have implemented restrictions or bans on short-term rentals. Previously, in the Ben Van Don area (District 4), both short-term and long-term rental prices were very good. However, due to the negative consequences and controversies surrounding short-term rentals, many apartment buildings banned this service months ago.

Data collected by DKRA Group shows that rental prices have decreased by about 15-20%. In the short term, Mr. Thang believes that secondary market apartment prices will be affected. However, in the long term, secondary market prices will not decrease because projects in central areas have the unique characteristic of prime locations.

Sharing the same view, Mr. Dinh Minh Tuan - Director of the Southern region of Batdongsan.com.vn - believes that the regulations of Ho Chi Minh City will affect the central market and the high-end segment more. This is because short-term rental business models are usually implemented in central areas with convenient transportation.

This expert believes that in areas with active short-term rental activity, both apartment prices and rental rates typically increase. However, with Ho Chi Minh City's decision, the rental apartment segment may be strongly affected, making long-term rentals less attractive. Apartment rental prices may remain stable in the near future, and in the long term, the market will adapt to the policy, and rental prices will not fluctuate too much.

According to Mr. Tuan, the current rental yield for apartments in Ho Chi Minh City is around 3% per year and has been maintained for quite a long time, although it previously reached 4-5% per year. This figure shows that apartments have become less attractive for both buying and renting. The market may shift capital from residential apartments to serviced apartments.

Many believe that Ho Chi Minh City's decision will negatively impact the tourism accommodation industry. However, Mr. Thang disagrees, arguing that there are already many alternatives to short-term rental apartments. Ho Chi Minh City has no shortage of hotels and serviced apartments, offering a wide range of segments and prices. Therefore, Mr. Thang even expects the hotel industry to revive.

In cases where the city has a ban but short-term rental businesses in apartment buildings continue, experts suggest that specific regulations and penalties are needed. For example, apartment owners and business operators found to be circumventing the law or operating illegally should be fined administratively. If illegal operations cause fires, explosions, or social problems, they could face criminal liability.

Source: https://dantri.com.vn/bat-dong-san/cam-cho-thue-luu-tru-ngan-han-trong-can-ho-chung-cu-o-tphcm-gia-co-giam-20250306090415635.htm