There are no apartments for rent under 10 million VND per month in the center of Hanoi

According to VARS, the price level of apartments is continuously increasing and establishing a new level, causing apartment rental prices to also tend to "climb", with an average increase of 10-20% in 2024.

In the city center, there are almost no apartments with rental prices under 10 million VND/month. The common rental price for a 1-bedroom apartment is 10 - 15 million VND/month, and for a 2-bedroom apartment is 15 - 20 million VND/month.

In suburban areas, the average apartment rental price ranges from 6.5 to 15 million VND per month, increasing from the common level of 3 to 8 million VND per month in less than 5 years.

According to VARS, when housing prices increase, landlords are forced to raise rental prices to ensure profits and balance investment cash flow. In fact, the profit margin from renting apartments is getting lower and lower because rental prices cannot keep up with the increase in housing prices.

The rental price growth rate is only half of the house price in 2024, on the basis that the profit margin from renting apartments in Vietnam is only around 4%, commonly below 2%, lower than saving.

In addition, the increase in construction material prices, maintenance costs and apartment management fees also contributed to pushing rental prices to new levels, especially for apartments with good locations and full amenities.

The change in thinking and lifestyle of young people, emphasizing flexibility in choosing a place to live, prioritizing renting a house to easily change accommodation according to work, lifestyle, or access to areas with better amenities, is also one of the reasons contributing to the development of the rental apartment market.

Along with the general upward trend of the real estate market, the rental prices of boarding houses, mini apartments, etc. have also skyrocketed. The continuous increase in rental prices has made it difficult for many workers, especially young people with average and low incomes, to maintain their lives in urban areas when the cost of renting a house accounts for 35-50% of their income. Combined with other living expenses, young people have almost no ability to save.

Many people are no longer able to afford it, forcing them to downsize, look for cheaper options or even leave the big cities. The trend of moving to the suburbs is becoming more and more obvious, thanks to rents that are about 20-30% lower than the center.

However, moving far away also brings many challenges when the public transport system has not developed synchronously, travel costs increase...

Notably, not only unskilled workers, but also highly qualified young workers have begun to leave urban centers. When the quality of life has not met expectations because young people find it difficult to find comfortable living space and good quality services at affordable rents.

At the same time, satellite provinces and cities are also developing strongly with many industrial parks, technology centers and modern services, with salaries not too different from the center, but the cost of living is significantly cheaper.

Therefore, VARS believes that, in addition to continuing to promote the development of the social housing segment, to support young workers, the State needs to soon research and develop a long-term rental housing fund at low prices, prioritizing young workers, civil servants, young intellectuals, and workers in key industries.

At the same time, investors should be encouraged to participate in building low-cost housing through tax incentives, loan support or land cost reduction. In addition, it is necessary to promote the development of public transport systems, helping workers easily move from low-cost areas to work centers.

"The government can study and apply the dormitory model for urban workers like in Singapore. Accordingly, in Singapore, the government provides low-cost housing for young people, single people and skilled workers, who can rent apartments at prices 40-50% lower than the market. When they have enough money, they can buy apartments with subsidy programs and low-interest home loans," said VARS.