“Hey bro, please leave the room for me over Tet”, “Hey nephew, you can delay paying the rent a few days after Tet”, “Hey sis, can you help me find someone to take over my room? I’m moving back to the countryside after Tet”… These are the messages and phone calls that N.V.T (24 years old, from Bac Giang) continuously received on the evening of the Lunar New Year instead of the usual transfer money notifications from tenants.
T confessed that he has an older brother who is a real estate broker and specializes in renting old high-rise apartments with multiple rooms from landlords, then invests in furniture and renovates them, and later runs advertisements to introduce them as mini apartments for rent at prices ranging from 3 to 4 million VND/month.
“When I first came to Hanoi to attend university, I often went to work with my older brother and found that making money from this renting broker job was quite easy, so I became more and more interested in it. I even prioritized working over studying and even asked to defer my academic results to earn money first. However, since the Covid-19 pandemic until now, my job hasn’t been as easy as before. I feel tired and regretful for neglecting my studies,” said T.
T’s tenants secretly packed their belongings and ran away, skipped paying the rent over Tet because the prices were too high.
Speaking with Tiền Phong (Money Front), T shared that even though the economy was difficult in 2023, many landlords insisted on increasing the rent prices despite having signed fixed rental contracts for 2 years. Most landlords gave the reason that other houses in the same area increased their prices, so they had to raise the rent as well.
Since he had already paid the deposit and rent for 2 years, and invested in furnishings and renovations, T had to increase the room rent to compensate for the extra demands from the landlords. This caused many of T’s tenants to react strongly and start returning the rooms, especially during the Lunar New Year holiday.
“Some tenants asked to delay the rent payment for more than half a month, and I was understanding at first, but then I couldn’t contact them anymore. When I went to check, the room was unlocked and all their belongings were gone without a trace. They called me later to apologize, but due to the high room rent, they had to run away…” T said with regret.
A real-life survey shows that despite a difficult year, not only the rental segment but also the housing market in major cities such as Hanoi and Ho Chi Minh City continued to escalate.
According to a report on real estate trends and consumer psychology by Batdongsan.com.vn, in the second half of 2023, among the top 3 reasons why people wanted to rent a house, “flexibility” accounted for 38%, “not wanting to buy a house because of unreasonable prices” accounted for 29%, and “not having enough money to buy a house” accounted for 26%.
Based on the survey, the report also made a forecast of real estate trends and consumer psychology. Specifically, in the first half of 2024, “not having enough money to buy a house” will continue to be the top reason for people choosing to rent, accounting for 33%. Meanwhile, the motivation to rent a house for “flexibility” will decrease, only accounting for 27%.
The high rental prices are becoming a barrier for the people.
The survey indicates a growing trend of renting houses due to financial constraints predicted to increase in the first half of 2024. Specifically, apartments are the most sought-after type of rental property (43%), followed by houses (18%) and rooms for rent (18%). Only a small percentage (9%) are interested in renting townhouses.
Mr. Le Bao Long, Strategy Director of Batdongsan.com.vn, said that the majority of Vietnamese people are only willing to spend 10% – 30% of their income on monthly rent.
Likewise, the average rental price for rooms in Hanoi and Ho Chi Minh City is currently around 3.5 – 4.8 million VND/month, while the rent for apartments is about 12.5 – 13 million VND/month. This means that in order for an individual/family to afford rent, their total monthly income must range from 15 to 20 million VND if they choose a room and 30 to 40 million VND if they rent an apartment. However, this is not considered a low income for the majority of Vietnamese people. Therefore, the high rental prices are becoming a barrier for the people.
In the face of challenges in the rental market in the previous year, many real estate experts shared with Tiền Phong that to overcome financial difficulties, tenants should actively seek smaller properties or those located further from the city center.
Meanwhile, according to the Report on Real Estate Trends and Consumer Psychology, when asked about their adaptation plans for high rental prices, 67% of real estate consumers said they planned to rent smaller houses; 27% would rent further away; 20% would live with more people; and 13% would rent places with fewer amenities.
In the context of the majority of tenants trying to tighten their budget and expect more reasonable prices, 70% of landlords are also willing to reduce the rent by commonly less than 10%.
Despite the difficulties and challenges in 2023, real estate experts and brokers believe that the rental market will soon recover in 2024.
The experts believe that the above-mentioned approach will help landlords easily connect with high-demand customers, anticipate the increasing search trends in the new year, and help tenants find suitable housing quickly.
As for T and many other brokers, despite the difficulties and challenges they faced in 2023, they believe that the rental market will soon recover in 2024. In the short term, they will try to negotiate with landlords to reduce the rent, help tenants, etc.
