Rental yields on apartments have declined in HCMC over the last decade to 3.8-4% now, and trail other Southeast Asian counterparts.
Data from real estate trading platform Batdongsan shows that the rental yields on apartments in HCMC has dropped from 4.6% last year to just 3.8-4% this year.
In comparison, yields are 6% in Indonesia and Thailand and 5% in the Philippines and Malaysia.
Property consultancy CBRE Vietnam says HCMC yields fell from 7-7.5% in 2015-16 to 5-6.5% in 2017-19 before hitting a record low of 2.5-4% in 2020-21 during the COVID-19 pandemic.
Dinh Minh Tuan, southern regional director of Batdongsan, says the widening gap between rents and prices has made apartment rentals a less attractive investment.
Over the last five years apartment prices in the country have increased by 59% while monthly rents have
only risen by 10-15%.
Apartment prices in HCMC
have increased by 17% this year, while rents have only
risen by 3-10%.
The rental market has also struggled with low demand since the pandemic as tourism has only recently recovered and the economy continues to face many difficulties.
Duong Thanh Ha, sales director at Realty Home, a consultancy specializing in apartment rentals in HCMC, notes that more than 70% of apartments for rent in the city are temporary businesses.
The owners are only renting out their properties to cover maintenance costs while they wait to sell once the market picks up, she adds.
Tuan of Batdongsan says the total return on apartments, when factoring in both price appreciation and rents, is currently 12.5-17% a year.
“This rate of return is still appealing for those who want to build assets while earning rental incomes on the side.”
Source: Vnexpress
