In Vietnam’s high-end housing market, majestic towers and luxury villas once symbolized elite status. Yet behind the opulent façades, many properties now lie vacant, collecting dust, with "For Rent" signs left untouched for months on end.

Surveys across upscale areas such as Tay Ho, Cau Giay, Trung Hoa Nhan Chinh, and My Dinh reveal no shortage of listings asking USD 1,200 to 2,000 per month. But despite being on offer for extended periods, they attract little to no interest. Some units have had to cut asking rents by 20–30% compared to the pre-pandemic period.

Initial investments in these properties often ranged from USD 280,000 to 600,000. As a result, rental yields have become increasingly unattractive.

Previously, this segment thrived on demand from foreign professionals and senior executives of multinational firms. But that tenant base has shrunk significantly, leaving large, lavish apartments - once tailored to the ultra-affluent - struggling to find suitable renters.

Ms. Thao, a homeowner in Trung Hoa Nhan Chinh, shared that her 150-square-meter apartment was once leased to a foreign expert for USD 1,600 per month. Today, even after reducing the rent to USD 1,200, she has yet to find a tenant. In the past year alone, she has lost hundreds of millions of dong in potential rental income.

Bleak outlook for luxury villas

In Tay Ho, a fully furnished villa can still command between USD 1,800 and 4,800 per month, with prices for large, detached properties exceeding USD 8,000. Meanwhile, in areas like Ha Dong and Nam An Khanh, row houses are being offered for USD 600 to 1,000 per month as office or residential space.

Incomplete homes or those in areas with poor infrastructure are being listed for as low as USD 300 to 500 per month. The major hurdle remains incomplete infrastructure, limited amenities, distant locations, and lack of essential services for high-end clientele.

Luxury leasing in decline

According to Nguyen Manh Cuong, a real estate financial consultant, while prices for luxury apartments and villas continue to hit new highs, the rental market is plunging into stagnation.

The primary reason is the sharp decline in high-level foreign tenants - executives and technical experts from global corporations - who were once willing to pay premium prices for top-tier living environments.

Post-pandemic, many companies have shifted to cost-cutting measures such as hiring local staff or adopting remote work. The few remaining foreign experts are now more frugal with their spending.

Wealthy Vietnamese clients, including entrepreneurs, celebrities, and senior managers, are also tightening their budgets. Spending USD 1,200 to 2,000 per month on rent is no longer seen as a wise option when alternatives like serviced apartments or returning to family-owned properties are available.

As a result, the volume of luxury rental listings has surged, intensifying competition among landlords. A basic calculation shows that a property expected to generate USD 2,000 per month in rent will lose USD 24,000 annually if it remains vacant- not counting maintenance, upkeep, and bank interest.

For high-end villa projects, landlords typically spend an additional USD 80,000 to 120,000 on interior finishes. With dwindling demand, many such properties have remained unoccupied for years.

Mr. Cuong noted that the luxury rental segment is undergoing a phase of cleansing. The question is no longer about owning a prestigious asset but rather about matching real market needs, selecting strategic locations, and managing investment costs effectively.

Faced with the risk of cash flow drying up, many homeowners in western urban zones have resorted to "lowering their pride" by turning their villas into warehouses, workshops, or temporary offices for delivery firms. Though rental rates for such uses are far below the property’s true value, it offers a stopgap solution - someone to look after the house and partially offset monthly expenses.

Duy Anh