In many old streets of Hanoi, the streets known as “golden land” and “profitable for any business” such as Hang Ngang, Hang Bo, Hang Dao, etc. have all been hanging up “for rent” signs for the past few months.
Notably, these are all prime locations that were once rented for tens to hundreds of millions of dong per month. However, to date, many of these premises are closed and locked, with no one passing by.
Even on some central streets of Hoan Kiem district (Hanoi), located right on the Hoan Kiem Lake walking street, a bustling place of trading activities in the center of Hanoi, shops are also closed and have signs for rent.
Or on Ta Hien Street, famous as the "play" street of Hanoians, always bustling with people from both domestic and foreign tourists, there are also signs for renting houses.
Townhouse rental price nearly 100 million VND/month
According to the real estate market report for the second quarter of 2023 compiled by Batdongsan.com.vn, the Hanoi real estate market still recorded positive signals from information on general planning, traffic infrastructure and policies. Some segments of this market also had positive changes.
However, compared to the first quarter of 2023, the rental market only recorded a 1% increase in interest in the townhouse segment, almost flat compared to the previous quarter.
Meanwhile, rental prices have decreased sharply in many districts such as Ba Dinh down 19%, Hoang Kiem down 3%...
Explaining this, Batdongsan.com.vn said that the poor business situation of retail units has caused great economic pressure in maintaining rental premises. Many businesses have had to return stores or terminate contracts, directly affecting the operation of the rental real estate segment.
Street-front houses have no tenants (Photo: Trong Tung).
Talking to Nguoi Dua Tin , Ms. Tran Minh Anh (29 years old), who is running a Rooftop Cafe on Ly Nam De Street, said that to rent 2 rooftop spaces with a total area of about 100 square meters on Ly Nam De Street, she has to pay more than 60 million VND per month.
However, recently the economic situation has been difficult, the number of people using the service has decreased, causing the restaurant's revenue to decline significantly.
“Previously, my shop earned at least 150-220 million VND per month from business, but now on average I only earn more than 3 million VND per day, sometimes even less than 2 million VND in revenue, just enough to pay the rent. I am also considering moving the shop to an area far from the center to save on rental costs,” said Ms. Minh Anh.
On the landlord side, the situation is not much better. The owner of a 3-storey house on Tran Xuan Soan Street (Hai Ba Trung) currently has a “For Rent” sign with a usable area of 170m2 on the first floor, no partitions so it is suitable for long-term office rental.
According to Ms. Thu Huong (42 years old), the owner of the house, more than ten years ago the rental price was 75 million VND, now even though it is cheaper than the market price of 90 million VND, there are still no tenants.
Ms. Huong said that many people also called to ask about renting the house, but when they heard the price quote, they all mumbled that they would come and see it when they had free time or said they would think about it and then "disappeared". Since then, many months have passed but the house is still on the list of "looking for a new owner".
The owner would rather leave the house empty than reduce the price.
Although the difficult period due to the impact of Covid-19 has ended, it seems that all economic activities will recover sooner than ever, but the golden land of the old quarter is still quiet.
Mr. Nguyen Trong Long (35 years old), who currently owns a house on Lo Su street and is also a real estate broker for renting townhouses, said that the problem that makes tenants turn their backs on townhouses is the price.
Firstly, the townhouse segment is always advertised for rent at prices of nearly a hundred million VND or more, large areas in the old town center have rents of up to several hundred million/month. In times of tight business like today, the cost of investing in premises is too high for customers, making them feel the risk is high.
House for rent on Hang Bong street. (Photo: Trong Tung)
Second, landlords often require tenants to pay a deposit of at least 1 month and sign a contract of 6 months to 1 year, which makes tenants hesitant. Having to pay a large sum of money at this time poses a difficult economic problem.
In addition, purchasing power in most industries is low. Meanwhile, the cost of renting premises in central areas is always expensive, "the price of renting townhouses only increases and does not decrease, making it impossible for many units to bear", said Mr. Long.
Although many people come to rent their houses, most owners of townhouses have the mentality of keeping the price, rather than lowering the rent to a suitable level.
Accordingly, Mr. Long said that since the beginning of the year, he has only closed 2 transactions, a premises on Khuc Hao Street (Ba Dinh, Hanoi) with a rental price of 85 million VND/month, 1 year in advance without deposit; a small shop on Ly Nam De Street with a rental price of 45 million VND/month, 6 months in advance, 3 months deposit.
Mr. Nguyen Van Dinh - Chairman of Vietnam Real Estate Brokers Association.
Sharing with Nguoi Dua Tin , Mr. Nguyen Van Dinh - Chairman of the Vietnam Real Estate Brokers Association said that in reality, the demand for renting business premises on prime streets is still increasing.
Because the demand for trade is becoming more active again, the real estate market is "frozen", making rental real estate a bright spot.
However, the market still records a situation of vacant rental houses due to the price being too high, causing landlords and tenants to not find a common voice. Although this segment has a lot of potential for development in the future, it needs sharing from the landlords to come up with more suitable prices .
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