Prices have plummeted by over 30 per cent, as many businesses in the city centre have been forced to close down due to poor business operation, leaving landlords with no choice but to accept lower prices in order to attract tenants.

Nguyễn Thái Phong, a property owner on Nguyễn Trãi Street in District 1, told Việt Nam News he had to reduce the rental price for his spa salon space from nearly VNĐ100 million per month to VNĐ65 million per month.

He said it was necessary for both landlords and tenants to negotiate during difficult times, as both parties would suffer otherwise.

A number of streets in the downtown area such as Lý Tự Trọng, Hai Bà Trưng, Trương Định and Nguyễn Trãi streets, which were previously bustling with businesses such as hair salons and fashion stores, now remain vacant.

Demand for rental properties in the central area of the country’s largest city has decreased by 6 per cent due to challenging economic conditions.

According to a survey by real estate firm Savills, rental prices for townhouses on central streets in the city have experienced an average annual decline of 8 per cent since 2019.

The total leased area in the city centre has reached its lowest figure since the fourth quarter of 2022, it said.

Real estate experts have attributed the sluggish commercial property rental market to the slowing economic growth and a shift in consumer behaviour towards online transactions.

As a result, landlords have been forced to offer price reductions of 20 per cent to 30 per cent to attract tenants.

Lê Quốc Kiên, an independent real estate expert, predicted that rental prices would only reach 80 per cent of 2019 levels by the second quarter of next year.

He recommended future investors be aware of the rental prices in the area and plan accordingly.

With an oversupply of available properties and a decrease in demand, tenants are now in a position to negotiate significantly lower rental prices.

Nguyễn Viết Túc, a real estate broker in District 7, told Việt Nam News on the phone: “The future of the rental market in downtown HCM City remains uncertain.”

The decline in rental prices for townhouses in the city’s downtown areas reflected the overall economic impact post pandemic on the real estate market.

“As businesses continue to struggle and consumer behaviour continues to evolve, it is uncertain when or if rental prices will bounce back to pre-pandemic levels,” he noted.

In the meantime, both landlords and tenants must adapt to the current circumstances and work together to find mutually beneficial solutions, he proposed.

Landlords may need to consider offering more flexible lease terms or additional amenities to attract tenants, while tenants must be realistic about their budget constraints, he added.

Both landlords and tenants should navigate through these challenging times and find success in the ever-changing real estate landscape, experts noted. — VNS