Some 2,000 of the 6,500 serviced apartments in the city remained unoccupied, the lowest occupancy rate since 2016.

Savills said the market was severely affected by the Covid-19 pandemic. One grade B and five grade C properties pulled out of the market and became office buildings. Serviced apartments, to attract tenants, have been offering discounts or free utilities.

The rental apartment market, a competitor, also experienced a drop in rents. A survey by VnExpress found apartment rents fell by an average of 20-30 percent.

HCMC will have around 41,000 new apartments entering the market in 2021, according to real estate Colliers International Vietnam.

These units would pose a strong competition to grade B and grade C serviced apartments, it said.

Another competitor, vacation rental market place Airbnb, is going through a slump after tenants canceled bookings due to the fear of coronavirus.