Lower prices to find long-term tenants
The Ho Chi Minh City People's Committee has issued Decision No. 26 on management and use of apartment buildings in Ho Chi Minh City, in which apartments are clearly regulated to be used only for rental purposes, absolutely not to use apartments for other purposes (short-term tourist accommodation, Airbnb...). The lease must have a signed contract between the homeowner and the lessee.
Currently, many apartment projects have issued notices requiring homeowners to stop selling this service. This makes it difficult for investors who are leasing for business in the form of Airbnb to find long-term tenants.
Mr. Doan Viet, residing in An Phu ward, Thu Duc city, said that he spent billions of VND to buy an apartment in the Imperia project, and is also renting apartments and taking management to help acquaintances do business in accommodation services in this area. Currently, after the ban decision, all the apartments he is managing are vacant because it is not easy to find long-term tenants.
Mr. Viet said that the reason why the Airbnb model is chosen by both international and domestic visitors is because the price of each apartment is only about 1.2 million VND/day, visitors can stay with 4-5 people and have the same amenities as at home. However, he also admitted that this accommodation also has some problems that cause inconvenience to residents.
The apartments he bought and is managing are high-end products, so the long-term rental price will be around 26 million VND/month. This is a fairly high price and the main customers are families of foreign experts. But it is not easy to find tenants at the moment. Therefore, he is calculating to reduce the rental price to find tenants.
Mr. The Nguyen, specializing in cooperating in the business model of Airbnb with many apartment lenders in Vinhomes Central Park urban area (Binh Thanh), said that after the ban from the Urban Area Management Board, he had to discuss with apartment owners the option of switching to finding long-term tenants and of course had to accept a strong rental discount of 20-25% to compete because the number of rental apartments is increasing dramatically.
Need to study management models
According to a market survey, some rental apartments following the Airbnb model in districts 1, 3, 4 and Binh Thanh have banned short-term accommodation, long-term rental prices have decreased by 15-20%. The same development is predicted by brokers to continue to happen to many other luxury apartments.
Because according to incomplete statistics from some brokerage companies, the number of rental apartment models for Airbnb in Ho Chi Minh City is up to tens of thousands of apartments. When they have to stop suddenly, apartments rush out to find long-term tenants, the market cannot absorb them all.
By preventing bars from allowing businesses to do business, Mr. Viet said that it really affects the rights of those who have invested in apartments. Because those who buy apartments for business and still have to pay the bank or those who have invested hundreds of millions in interior design without recovering their capital will have a very difficult time, even left empty-handed.
Current legal regulations do not clearly define the Airbnb model. So there should be policy corridors to put short-term accommodation services under management to comply with the law, add a method of accommodation for tourists, and pay taxes to the budget, Mr. Viet stated his opinion.
Dr. Nguyen Duy Phuong, Investment Director of DG Capital, said that the ban on short-term accommodation rental can create a chain reaction, creating great pressure on the rental segment in particular and the real estate market in general. This policy needs a roadmap for businesses and investors to have time to adapt, avoiding causing great damage. So the government needs to have regulations to lease short-term apartments such as Airbnb operating within the framework, managing and meeting the needs of a part of tourists. However, it is also necessary to ensure the interests of residents and avoid discomfort from this rental activity.
