A survey by VnExpress found that the Covid-19 pandemic has in the past 10 months caused major changes to supply, liquidity and value in the market.

Rents for townhouses have dropped by 25-40 percent since before Covid and for apartments by 15-20 percent. Lease rates for commercial and office properties are down 25-50 percent depending on how severely the pandemic has impacted a tenant’s business. Through October and November the decline has continued.

But despite this the asking prices for property has showed no sign of going down, with those of private houses rising by 20-36 percent year-on-year.

Apartments continued to rise to new price levels in both the downtown area and suburbs.

Supply is down around 60 percent due to the impact of the pandemic and slow licensing by the city authorities.

Speaking to VnExpress, Phan Cong Chanh, general director of Phu Vinh Group, said the divergence in prices and rentals had originated in the sudden impact caused by the pandemic. Demand for leasing properties decreased as businesses were hit by the pandemic, causing rents to plummet.

But selling prices increased due to the low supply. Chanh also said demand for buying property has fallen due to low confidence in an economic recovery.

The next 12-18 months would see the market enter a second challenging period once the bad debt cycles start having an impact, he said.

Soon banks would be busy liquidating bad debts, which are increasing, and hotels, shopping malls and apartment projects could well be in their sights, he said.

Vo Thi Khanh Trang, head of Savills Vietnam's market research department, said while property selling and rental rates are related, they are affected by different factors.

Thus, while the rents have been dropping sharply in many property segments throughout the first three quarters of this year, there has been no noticeable impacted on property value, she said.

A property's rental rate depends heavily on tenants' ability to pay while the selling price reflects its value, which depends heavily on demand and supply, she said.

But she admitted that the contradiction between surging selling prices and plummeting rental rates would make investments in rental properties inefficient in the short term.