The Thai Nguyen Province native says his family is preparing to move for a second time in a year because of increased rent.
Last year the couple lived in a 55-square-meter, two-bedroom apartment in an urban area in western Hanoi for VND9.5 million (US$360) a month.
When the lease ended early this year the owner added furniture and raised the rent to VND11.5 million. The couple chose to move to a one-bedroom unit for VND9 million.
Six months later the landlord sold the apartment, and the new owner informed them that the rent would rise by 15% at the end of the lease because of “rising property prices.”
“We are considering moving further away so we can have more space at a reasonable rent,” Phuc says.
Thu Uyen of Hai Phong City was surprised when the rent for the apartment she had lived in for two years in the capital’s Thanh Xuan Ward went up by 15%. She had been paying VND15 million a month for the three-bedroom place.
At the start of August, when the lease ended, the landlord raised it to VND17 million because they had installed new fire safety equipment. The landlord said she would have to move out soon if she did not want to pay since there was high demand.
Other apartments in the building cost similar prices, with some landlords adding furniture and increasing the rent by as much as VND3 million.
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High-rise apartments in central Hanoi. Photo by VnExpress/ Ngoc Thanh |
Uyen decided to move out and rent a mini apartment in an alley instead.
“Every bit saved on rent counts,” she says.
The Vietnam Association of Realtors (VARS) says there are no commercial apartments available for under VND10 million a month in the central districts of Hanoi.
Typically, it costs VND10-15 million for a one-bedroom unit and VND15-20 million for a two-bedroom unit.
In outlying districts, the average rents now are VND6.5-15 million a month, up from VND4-8 million five years ago.
Data from property listing platform Batdongsan shows average rents at many places have risen by 10-15% from a year ago, and even more in some places.
At Imperia Smart City, rents are up more than 20% from last year, while Indochina Plaza Hanoi has seen an 18% increase.
Three-bedroom units on Nguyen Tuan Street, Ha Noi City, go for VND18-19 million a month, 5% higher since the start of this year. Similar apartments on Duy Tan Street go for VND19-20 million, up 10%.
Pham Duc Toan, CEO of EZ Property, says the relentless rise in apartment purchase prices has pushed rents higher. He says apartments for lease remains an attractive option for many investors.
Over the past year prices at many housing projects have jumped by 40-50%, prompting landlords to raise rents.
Analysts at real estate firm Avison Young say demand from people switching from buying housing to renting and from workers coming to the increasing number of industrial parks has driven up rents. Limited supply is preventing many tenants from leaving Hanoi despite higher costs.
Nguyen Van Dinh, chairman of VARS, says high rents are challenging for young families, with housing costs taking up 35-50% of their income and leaving little room for savings.
Many people are opting for cheaper housing, downsizing or even moving out of major cities.
A recent VnExpress poll of more than 7,800 readers found nearly 1,100 planning to leave Hanoi for their hometowns due to the high housing prices and rentals.
Dinh says the trend of moving to the suburbs and provinces is becoming common since rents in these areas are 20-30% lower than in the city though the underdeveloped public transport and higher commuting costs are a challenge.
Experts call for developing low-cost, long-term rental housing alongside social housing for young workers, civil servants and employees in key industries.
VARS suggests a dormitory model for urban workers similar to Singapore, where the government provides affordable apartments for young people, singles and skilled workers through the Public Rental Scheme and Build-to-Order program managed by the Housing and Development Board.
Under the public rental scheme, recent graduates without the means to buy a property can rent public apartments at 40-50% below market rates, and through the build-to-order program can buy subsidized BTO apartments at low interest rates.
