Mr. Minh Lien - who used to own a fashion store on Hiep Binh Street, Thu Duc City, Ho Chi Minh City - said that he previously rented the premises for 25 million VND/month, but because of poor business, he often had to compensate for losses. "Feeling that I could not continue, I had to return the premises. Then I rented a house in an alley to sell online, although it did not make much profit, it was less stressful than before" - Mr. Lien said.
According to the reporter of Nguoi Lao Dong Newspaper, the wave of returning premises in Ho Chi Minh City has lasted since the beginning of the year but shows no sign of ending. It has even spread from the central area of District 1 to busy streets in Districts 3, 5, Go Vap, Thu Duc City... It is worth mentioning that although rentals are sluggish, very few landlords are willing to reduce rents like in the years of the COVID-19 pandemic.
An empty space on Hiep Binh Street, Thu Duc City.
Mr. Son - 62 years old, owner of some premises in Thu Duc City - explained that the houses he is renting out are all very cheap, you could say lower than the general price level, so he cannot reduce the price any further. "The reason why the houses have not been rented out is because they have not found suitable customers. The price I am offering for rent is already quite cheap, so I cannot reduce it any further. If I want to reduce it further, I have to sign a contract for at least 4-5 years with the condition of a 10% increase after the end of the first year. Otherwise, I will leave it there, when the market stabilizes, there will be customers. I also have a row of houses for rent, with a steady monthly income, so I am not in a hurry," said Mr. Son.
According to lawyer Nguyen Tan Phong, Standing Member of the Vietnam Real Estate Brokers Association, most of the rental premises are currently mortgaged by the landlord, so if the price is reduced, it will affect many aspects. "For financial investors, whether or not to rent is not too important, but if the rental price is reduced, it will affect the general price of the premises, asset valuation and other issues," Mr. Phong explained.
Meanwhile, Mr. Nguyen Tat Thinh, founder of Housezy Joint Stock Company, said that most of the vacant premises in the central area of Ho Chi Minh City or on major roads are often owned by people with good financial capacity. "They accept to leave them vacant rather than reduce the rental price because if they reduce it deeply, it will affect the general level and the future rental price in the area will be difficult to increase. In addition, renting premises is sometimes not their main job but only a secondary source of income," Mr. Thinh said.
Mr. Kien, Deputy General Director of Wowhome Investment and Development Joint Stock Company, analyzed that there are 4 main reasons why many premises are vacant but the landlords still refuse to reduce the rent. Firstly, 80% of vacant premises in the center of Ho Chi Minh City are state-owned, so it is very difficult to reduce. Secondly, because there are too many brokers advertising a premises, the landlords feel lost in a "matrix" of information and cannot make a decision. Thirdly, the owners of those premises usually have 5-7 houses, they accept to take a loss for a few months because they think that next year, when the economy recovers, they will be able to rent at a higher price. Finally, if the price is reduced to get tenants, it will be very difficult to increase it to the desired price later.
Source: https://nld.com.vn/kinh-te/vi-sao-gia-mat-bang-cho-thue-khong-giam-20231113212245867.htm
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