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Short-term rentals fear restrictions

Published

14 hours ago

April 26, 2025

Investors in Ho Chi Minh City who provide short-term apartment rental services are at risk of being fined or losing their deposits under a strict new ban.

Some apartment or homestay operators have spent thousands of US dollars on their accommodations, Photo: Shutterstock

Ho Chi Minh City People’s Committee has banned daily and hourly accommodation rentals on apartment buildings, except for mixed-use complexes including apartments for renting to official tourists.

Decision No.26/2025/QD-UBND dated February 27 provides stricter regulations on the operation of apartment buildings which were licensed for residential only. The decision guides that for apartment buildings with the sole purpose of use for residence, the apartment rental must have a contract signed between the apartment owner and the person in need of renting, the rental purpose must be established for residence only, not for tourism renting.

With the number of apartment towers soaring in recent years in Vietnam’s biggest city, many owners lease their properties exclusively to short-term renters, having the higher yield.

According to real estate expert Tran Khanh Quang, apartments for rent on the market are currently divided into two segments. “Average qualified apartments with the prices from $80,000-120,000 per unit are not affected by this ban because this segment is suitable for long-term rental, with the yield from 4-5 per cent per year,” Quang said.

“Meanwhile, investors renting out mid- to high-end apartments, with prices from $120,000-200,000 per unit, are facing difficulties. Because this type of apartment is mainly located in the central area, short-term rental business will bring higher profits, with the yield from 5-6 per cent per year,” added Quang.

In Hanoi, where short-term rentals remain legal for now, property owners are watching closely. Many fear Ho Chi Minh City’s policies could soon extend to the capital (see below).

Le Quoc Tuan, who operates a homestay in Hanoi’s Hoan Kiem district, worries that blanket restrictions will disrupt an industry that caters to short-term travellers. “The majority of my guests stay for just two or three nights, either for leisure or business,” said Tuan. “Without that demand, sustaining our business model will be incredibly difficult.”

Long-term leasing is not a practical alternative for many homestay owners. Unlike traditional landlords, they have invested heavily in designing short-term accommodations, from high-end furnishings to curated guest experiences. The pivot to longer stays would require an entirely different business model.

The popularity of short-term services has also resulted in conflict between short-term tenants and long-term residents. According to Mai Hoang, a resident living in Gold View Buildings in District 4 of Ho Chi Minh City, short-term guests usually make more noise at night because of late arrivals, karaoke, or drinking.

“They bother us a lot, especially the older people who need more quiet time to relax, as well as others after the working day,” Hoang said.

Tran Minh Ai, senior director of Property Management for Savills in Ho Chi Minh City, commented that this decision was considered necessary to more closely manage apartment rental activities, returning the living environment to residents in apartment buildings for residential purposes only.

Ai added that in Ho Chi Minh City, many opinions have been recorded recently because the Law on Housing 2023 mentioned that apartments can only be used for living in.

“However, there are still controversies about whether short-term rentals can be called living or tourist accommodation. This new decision has clarified the information and is consistent with the provisions of the law, creating conditions for management units in supervision, while limiting the shortcomings of the short-term rental model in apartments, ensuring amenities and living environment for residents,” Ai said.

In apartment buildings in District 4, such as Icon 56, The Tresor, Milelium, Gold View, their operating boards do not allow short-term tenants to rent the apartment. This move has put many Airbnb service investors in a difficult place.

Manh Dat, director for Minh Dat Real Estate, who uses the Airbnb platform for renting, said he has been doing business in short-term rental for nearly 10 years and was renting out nearly a hundred apartments in many projects in Thu Duc city, Binh Thanh district, District 7, and Phu Nhuan district.

“Most of the apartments being operated are rented from the owners, with monthly costs ranging from $600-1,000 per month,” Dat said.

According to Dat, the short-term rentals are easier to draw in guests and generate better income than long-term rentals, with revenue from renting an apartment sometimes reaching $2,000-2,400 per month. “With the ban, we are at risk of losing thousands of US dollars each month, bearing contract termination and losing deposits from customers who have booked in advance,” Dat said.

Meanwhile, individual investor Hoang Mai said that she had spent hundreds of thousands of US dollars with bank loans to buy two apartments in District 7 to carry out Airbnb rentals. In addition, Mai also spent nearly $40,000 for furniture, design, cleaning services, repairs, and advertisements.

“The investment amount is not small, but I have not received much return before the ban. This is the family’s main source of income, used to pay the bank and normal services. If the management board requests, I will switch to long-term rental, but the profit from long-term rental is not as good, it is difficult to find customers, and I am afraid it will be difficult to recover the capital,” she said.

In addition, if short-term rentals cannot be exploited, some investors will find ways to sell their products. This increases the number of apartments on the secondary market.

Vo Hong Thang, deputy general director of DKRA Group, said that this ban would not affect tourism activities or the local economy because the market did not lack alternative products such as hotels, serviced apartments, and individual homestays.

“However, this movement will affect the liquidity of the apartment segment as well as the profits of investors. In fact, in many apartment projects that once strictly prohibited short-term stays, rental prices have subsequently decreased by 15-20 per cent,” Thang said.

Dinh Xuan Kien, owner, Phen Homestay Hoan Kiem district, Hanoi

Currently, the majority of my homestay guests prefer short-term stays, typically between two and three days, to enjoy their travels, explore the local area, and experience a comfortable living space. This group constitutes my primary source of revenue, as is the case for many other homestay businesses. Meanwhile, demand for long-term rentals remains relatively low, as long-term tenants often opt for traditional apartments or private houses for greater stability and convenience.

Therefore, if the short-term rental ban is enforced in Hanoi, I believe it will cause significant losses. It will not only directly impact my business but also negatively affect the entire homestay sector, which heavily relies on short-term travellers. Moreover, this regulation could place many homestay owners in a difficult situation, having invested significantly in renovations and furnishings but being unable to operate their businesses as intended. Restricting short-term rentals may reduce the appeal of this accommodation type, making the homestay market less vibrant and affecting the income of many individuals and businesses in the tourism and hospitality industry.

Pham Van Tien, owner, The Happy Stay

I have invested approximately $20,000 in renovating and furnishing my homestay apartment, covering infrastructure repairs, interior decoration, and essential furniture purchases. This investment was made with the expectation of generating a stable rental income.

However, if Hanoi enforces a short-term rental ban, I anticipate a financial loss of around $800 per month. This would not only disrupt my income stream but also leave me struggling to maintain the apartment without any return on investment, ultimately affecting my ability to reinvest and ensure proper upkeep in the long run.

Moreover, as I operate under a long-term lease agreement with the landlord, the ban would have even broader implications. Losing the ability to legally rent out the apartment for short-term stays means I risk forfeiting my deposit of $2,400 and being locked into an unviable contract. This situation would create significant financial strain, making it difficult to recover my initial investment while still being responsible for ongoing rental costs.

To address security concerns, which are one of the main reasons behind the ban, I have already implemented strict guest screening measures. Every tenant is required to provide full personal information, and I conduct thorough security checks before allowing check-ins. Additionally, I frequently monitor the apartment’s surroundings and enforce clear regulations on guest behaviour to minimise disruptions to permanent residents. If needed, I am also open to organising safety awareness sessions for guests to further enhance security within the building.

Le Viet Anh, owner, Homestay apartment Tay Ho district, Hanoi

I currently rent apartments from landlords under long-term leases of one to three years, with security deposits of around $3,200 to $4,000 per unit. If the ban takes effect, I won’t be able to continue my business, leading to major financial losses. I would lose my deposits, along with the money I’ve spent on renovations and furnishings. On top of that, I might also have to pay penalties for breaking my lease agreements, making the financial hit even worse.

I understand concerns about security and disturbances caused by short-term rentals and have already implemented strict measures to ensure guest quality and safety. These include verifying guest identities before check-in, installing security cameras at entry points, and restricting access to only registered guests. Moreover, I enforce strict rules on check-in times, guest capacity, and guest behaviour to minimise disturbances to permanent residents. I also work closely with building management to comply with all regulations and address any concerns from other residents.

Rather than imposing a complete ban, I hope there will be a more flexible regulations that balance security concerns with business sustainability. One approach could be issuing conditional operating licences, allowing homestay businesses to operate under strict security and guest management standards. Another solution could be permitting short-term rentals within regulated timeframes to reduce disruptions in residential buildings.

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Chinese battery maker Sunwoda plans extra $22 mln investment in northern Vietnam plant

Published

1 hour ago

April 26, 2025

Industrialzone.net

Sunwoda, a leading Chinese battery manufacturer, plans to invest an additional $22.5 million in a plant in Vietnam’s northern province of Bac Giang.

This additional funding will raise the project’s total expected capital to $30.2 million, according to Sunwoda’s submission to local authorities for feedback on its environmental impact assessment (EIA).

Sunwoda Vietnam Company Limited in Bac Giang province, northern Vietnam. Photo courtesy of the firm.

The company, also a supplier to Apple, received in-principle approval for the project in April 2023 and had made five adjustments to the plan as of February 2025.

The plant spans two hectares in Van Trung Industrial Park, Viet Yen district. It produces lithium batteries for headphones, mobile phones, computers, and other electronic devices, with an annual capacity of over 15.5 million units.

A recent addition to the project includes the production of breast pumps and other personal electric devices, with a planned annual capacity of 600,000 units.

The project will also produce battery management unit (BMU) circuit boards, with a yearly output of 6.64 million units.

At the current stage, the project employs 250 workers. Once fully operational, it is expected to employ around 350 workers.

Renovations of the factory are expected to be completed between April and June 2025, with operations set to begin in June 2025.

At a meeting with the Bac Giang government last July, Sunwoda’s executives revealed plans to invest an additional $300 million at the Yen Lu Industrial Park.

China is currently the biggest foreign investor in Bac Giang province, with total investments exceeding $6.6 billion.

Project

Hopes endure for real estate optimism

Published

2 hours ago

April 26, 2025

Industrialzone.net

There had been heightened optimism among investors when it comes to Vietnam’s real estate sector this year – but a spanner now may be in the works in the form of new and heavy US tariffs.

The unexpected decision of the United States to impose strict tariffs on Vietnamese exports to the US will likely have a knock-on effect on the country’s recovering real estate sector.

Hopes endure for real estate optimism, Photo: Le Toan

Dinh Minh Tuan, southern regional director for property website Batdongsan.com.vn, said that if the US tariffs are implemented on April 9 (see Pages 2-3), Vietnam may experience a decrease in foreign investment inflows, which may reduce the liquidity of the real estate market in the mid-range and low-end segments.

“There will be a risk that the demand for buying and renting houses by foreigners will decrease respectively,” Tuan said.

In addition, under the pressure of controlling inflation and exchange rates, homebuyers will have difficulty repaying their debts, leading to a drop in purchasing power, especially in the mid-range segment.

“The negative sentiment from the US will also cause the real estate market to freeze temporarily, the severity of which will depend on Vietnam’s ability to respond and the development of global trade policies,” Tuan added. “The real estate segments that will be greatly affected are mid-range real estate, industrial real estate, and possibly resorts.”

Before the US unveiled its plans for global economic upheaval last week, developers and investors in Vietnam had been bullish when it came to new projects thanks to a recently strengthened legal system, favourable economic indicators, and overall heightened optimism.

Major housing group Vinhomes plans to launch at least four new projects for sale this year: Apollo City in Quang Ninh province, Wonder City in Hanoi, Phuoc Vinh Tay in Long An province, and Duong Kinh in Haiphong city.

The group is also set to sell more developments in the new urban area Duc Hoa-Hau Nghia in the Mekong Delta province of Long An.

According to a report released by ACB Securities in March, Vinhomes’s Wonder City and Phuoc Vinh Tay may respectively contribute 20 and 12 per cent to Vinhomes 2025 sales contract value, expected at $3.7 billion.

Dat Xanh Group will restart Gem Riverside in Ho Chi Minh City later this year. Vietcombank Securities in a mid-March report said that the selling price level of Gem Riverside would be positive, at $4,400-4,800 per square metre, helping to bring in a cash flow of about over $1 billion over the next few years.

In parallel, Dat Xanh will also open the next subdivisions at Gem Sky World in Dong Nai province. Following 800 land plots sold in the Sapphire Parkview subdivision since 2024, Dat Xanh will launch around 400 more plots in 2025.

Meanwhile, Novaland also expects to earn a profit of $56 million this year thanks to the handover of more than 3,000 real estate products.

In addition to Aqua City, NovaWorld Phan Thiet, and NovaWorld Ho Tram, with legal progress to resume construction and sales this year, Novaland plans to open two other new complexes in Ho Chi Minh City: Park Avenue and Palm City.

New advances

Meanwhile, the Ministry of Construction has been studying international experience and reviewing regulations on the establishment of a National Housing Fund to develop low-cost housing in large cities.

According to real estate expert Dang Hung Vo, the fund will focus on supporting businesses and individuals through credit and tax policies.

“The state only plays a management role in this fund to regulate and ensure fairness in accordance with market mechanisms and the law of supply and demand. The state supports planning, land allocation, site clearance, and price regulation. Businesses and investors will be offered financial support to reduce pressure on project implementation. Thus, implementation will be faster, reducing investment costs, thereby reducing pressure on home prices,” said Vo.

Moreover, the Ministry of Finance has proposed to continue applying a 30 per cent reduction in land rent for 2025. This policy is a significant financial support measure that helps ease cost pressures for real estate businesses, particularly those leasing land from the state for development.

Prime Minister Pham Minh Chinh asked the State Bank of Vietnam and commercial banks to study preferential credit packages to develop housing for young people, while the Real Estate Association proposed applying an annual interest rate of 6-7 per cent for young people buying homes for the first time.

According to Duong Duc Hieu, director and senior analyst at Vietnam Investors Service, said that despite improvements in revenue recognition and cash resources, developer profitability and operating cash flow continued to deteriorate in 2024.

“However, we view 2025 as a year of stronger operating performance for developers. New housing supply from extensive developments since in the second half of last year, buoyed by robust homebuyer sentiment, will drive sales and enhance the financial performance of developers in 2025,” Hieu said in a report released in March.

“New policies will boost housing supply and demand in 2025 and beyond. The new Land Law, Housing Law, and Real Estate Business Law, effective since August 2024, along with over 20 guiding circulars and decrees, have accelerated developments and sales,” Hieu added. “The new housing supply will continue improving in 2025 while demand will recover unevenly, with further exuberance in the residential segment and lags in the hospitality segment.”

Confidence in the market

According to Michael Glancy, managing director for JLL in Thailand, Indonesia, Philippines, and Vietnam, the latter remains one of the fastest growing economies in Asia.

“As Vietnam’s property market enters a new chapter of economic growth, JLL remains optimistic about investment prospects for 2025, highlighting rising deal flows, resilient fundamentals, and ongoing regulatory enhancements as key drivers of growth. Vietnam’s real estate market is showing clear signs of strengthening, and we anticipate a significant uptick in investment activity as we progress through 2025,” said Glancy in JLL’s Vietnam Property Market Outlook 2025 report.

“The easing of borrowing costs and a notable boost in investor confidence are key drivers behind this positive trend. Vietnam’s fundamental strengths continue to make it an attractive destination for real estate investment across a range of sectors. As market conditions continue to improve, we expect to see a surge in transactions and development projects, reinforcing Vietnam’s position as a prime market for real estate opportunities in Southeast Asia,” he added.

After record-low supply levels in 2024, Vietnam’s residential sector is set for a resurgence, fuelled by new regulatory amendments that are improving transparency and approval processes. Developers and investors have historically focused on Hanoi, Ho Chi Minh City and increasingly on satellite areas, where demand is expected to pick up.

“The market is embarking upon a healthier cycle, supported by a combination of urbanisation, a growing middle class, and regulatory improvements. We anticipate stronger sales in well-planned residential projects, especially mid-to-high-end segments,” said Le Trang, country head of JLL Vietnam.

“Vietnam remains a top Southeast Asian destination for manufacturing, leveraging its strategic location. The country benefits from evolving local regulations, global shifts, and ambitious infrastructure development, making it increasingly attractive for industrial and logistics investments,” Trang added. “Vietnam remains one of the fastest growing economies in Asia. Disbursed foreign investment capital are expected to reach $25.4 billion by 2024, up 9.4 per cent on-year, with major infrastructure driving the development of real estate hotspots across the country.”

Marc Townsend, senior advisor Arcadia Consulting (Singapore)

I think it’s a bit too early to say what the long-term effects will be for the US tariff changes, but it’s certainly a huge wake-up call for the Vietnamese government and wider real estate market, especially the nascent industrial sector.

However, the industrial sector will almost certainly stall and possibly falter until there is more certainty with the ongoing negotiations. The wider real estate market was recovering well from a couple of years of low supply in Ho Chi Minh City and Hanoi; too much inventory and speculation in the second home sector in Danang, Nha Trang, and Phu Quoc; and the ongoing anti-corruption drive, low levels of confidence, and higher interest rates.

This year also started well with new government policy and laws regarding the real estate market, improving infrastructure, and a widening of the manufacturing base prompting the government to forecast 8 per cent GDP growth. This will be a more challenging proposition but, with Vietnam’s well-oiled diplomacy skills and the whole world now wearing sneakers that are made in Vietnam, not an impossibility.

Peter Ryder, executive chairman Indochina Capital

The large US reciprocal tariffs on Vietnam will definitely impact the real estate market, as its growth is dependent on GDP growth.

As of 2023, exports to the US accounted for nearly 30 per cent of Vietnam’s GDP. Thus, if the new tariffs are implemented, Vietnam’s GDP will be considerably affected, and this will in turn affect real estate growth.

Meanwhile, the manufacturing sector is at the heart of Vietnam’s economy and has been primarily responsible for its impressive growth over the years.

If these tariffs stand, the government’s growth target of 8 per cent in 2025 will no longer be feasible. With a depressed local, regional, and global economy, all of Vietnam’s economic sectors, including real estate, will be adversely affected.

For the industrial market, Indochina Capital has discussed this matter with some of its tenants at Core5 Vietnam, and all players understand the level of uncertainty surrounding this issue.

This tariff rate will not only affect leasing and releasing at all industrial properties across the country, but foreign investors will also think twice before committing their capital to Vietnam.

Project

Amkor urged to expand advanced chip packaging in Vietnam

Published

3 hours ago

April 26, 2025

Industrialzone.net

Deputy PM Nguyen Chi Dung has urged Amkor Technology, a U.S.-headquartered semiconductor firm, to expand its advanced chip packaging operations and increase its investments in Vietnam, as the country seeks to develop its nascent semiconductor industry.

Dung made the request during a meeting with the Southeast Asia Semiconductor Association (SEMI SEA), led by its President Linda Tan, in Hanoi on Wednesday.

The SEMI SEA mission included SungHun Kim, country manager of Amkor Technology Vietnam, and KL Bock, senior vice president for global flash backend operations at Western Digital.

Deputy Prime Minister Nguyen Chi Dung (right) hosts the Southeast Asia Semiconductor Association (SEMI SEA) in Hanoi on April 16, 2025. Photo courtesy of the government's news portal. — Deputy Prime Minister Nguyen Chi Dung (right) hosts the Southeast Asia Semiconductor Association (SEMI SEA) in Hanoi on April 16, 2025. Photo courtesy of the government’s news portal.

Deputy Prime Minister Dung proposed that Amkor support the National Innovation Center (NIC) in training engineers and establish its R&D center at the NIC.

To date, Amkor Technology has invested $1.6 billion in Vietnam through a semiconductor manufacturing plant in the northern province of Bac Ninh.

Regarding Western Digital, Dung encouraged the U.S.-headquartered data storage company to explore investment opportunities in Vietnam and consider setting up an office or R&D center in the country.

Addressing SEMI SEA, the Deputy Prime Minister called on the association to provide policy recommendations to help Vietnam develop competitive and attractive frameworks that can draw more investors and support the growth of the semiconductor industry across all stages, from design and packaging to testing and manufacturing.

Dung reiterated Vietnam’s commitment to improving its institutional framework and investment climate, as well as maintaining macroeconomic stability. He affirmed the government’s support for investors amid rapid and unpredictable global and regional changes, pledging favorable conditions for SEMI SEA members to invest effectively in Vietnam.