The yield, which is the ratio of a property’s rent to price, has fallen from 5.1% in 2023, according to real estate services firm CBRE.
The yield in HCMC is 3.7% and also trending downward.
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Apartment buildings in Hanoi. Photo by VnExpress/Ngoc Thanh |
CBRE said that, in comparison, in Asia the rates are 6.2% in Bangkok, 5.1% in Kuala Lumpur and 4.3% in Seoul.
Similarly, according to the online listing platform Batdongsan, rental yield for apartments in Hanoi and HCMC are declining.
Yields in both cities are now slightly above 3%, down from 4.9% and 4.5% respectively in early 2023.
Nguyen Quoc Anh, deputy general director Batdongsan, said the growing gap between property prices and rentals makes buying for lease less attractive.
In Hanoi, the average apartment price is VND70 million (US$2,648.25) per square meter after rising by 30-40% annually while rents have only increased by 8-10% in the comparable period.
Amid rising supply primarily in the high-priced segments this year and secondary market prices remaining high, Anh expected rental yields to decline further.
Vo Huynh Tan Kiet, director of the residential marketing department at CBRE Vietnam, said rental income is not the top priority for apartment buyers, and they are more focused on price appreciation.
Do Thu Hang, senior director of advisory and research services at Savills Hanoi, said apartment prices are high and speculators are driving them up further, and those with actual demand for housing are struggling to afford them.
This year Savills expects another 11,500 new apartments to be launched, the majority in the high- and mid-priced segments. Over the next two years it expects supply to rise by 46,600 units at 43 projects, mostly in suburban areas.
