Ms. Linh, who is renting an apartment in Thanh Xuan district, Hanoi, said that the rent for a 2-bedroom apartment here used to be around 8 million VND/month, but now it has increased to 10.5 million VND. When she asked the landlord, she received the answer that the demand for renting apartments is increasing while the supply is scarce, so the prices on the market are pushed up.
With this price level, Ms. Linh is very worried because the rent money already accounts for more than half of her monthly income. Therefore, she is considering the prices of some affordable dormitories to move to, accepting lower living conditions compared to the apartments.
“Not only the rent, but there is also a monthly service fee for apartments, so the total cost for accommodation is too high, making me and my husband unable to afford it. Many dormitories have been upgraded to mini apartments with full basic amenities, so tenants just need to bring their personal belongings to move in,” Ms. Linh said.
According to her survey, Ms. Linh learned that the rent for dormitories of around 40 – 50 square meters is only around 5 – 6 million VND/month, and the landlords also provide full furniture.
Many dormitories with full facilities are sought after by customers. (Illustrative photo)
Similarly, Mr. Tran Van Sinh (from Nam Dinh) also shared that at the end of 2023, he and his wife had to give up an apartment in Cau Giay district because they could not afford the sudden increase in expenses.
According to Mr. Sinh, initially, the rent for a 2-bedroom apartment was 8 million VND/month. However, from the end of 2023, the landlord announced a rent increase of an additional 1.5 million VND/month from the beginning of 2024 due to the rising rent rates in the market.
The highest income of the couple is only about 30 million VND/month, in which the cost of rent is 8 million VND. Now, with an additional 1.5 million VND, it means that the monthly financial income of Mr. Sinh’s family will only be over 20 million VND.
“Rental prices of apartments increasing like this narrow our savings, while there are still many unforeseen expenses. Therefore, we have to look for cheaper dormitories to have more monthly savings,” Mr. Sinh said.
Similarly, the dormitories with an area of about 40m2 (with mezzanine) can accommodate 4 people, with full furniture, and the current rent is only about less than 5 million VND. Although not as modern as apartments, the cost is nearly half that of apartments.
The trend of giving up apartments, renting dormitories is chosen by many families to reduce monthly expenses. (Illustrative photo)
Ms. Nguyen Thi Trang (real estate agent in Dong Da district, Hanoi) provided information that the recent rental prices of apartments are fluctuating due to increasing demand. Many apartments in Hanoi with an area of 48m2 and above currently have rent prices ranging from 7-15 million VND/month, instead of around 6-10 million VND/month at the beginning of 2023, depending on the segment.
Meanwhile, the rental prices of dormitories are also increasing, but they are still cheaper than apartment prices, about 2/3, or even half.
“Many dormitory landlords have changed their business methods to meet the increasing demand of customers. Instead of building shabby dormitory rows to save construction costs, they have switched to constructing small, fully furnished houses with amenities, and they look no different from small apartments, with the only difference is that they are located deep in alleys, without spacious living space like apartments,” Ms. Trang shared.
Research data recently published by PropertyGuru Vietnam Company showed that in December, the real estate rental market still faced many difficulties, but there was a positive change in demand for renting dormitories.
Specifically, in December 2023, the country recorded a 4% increase in listings for renting dormitories, but the demand for this segment increased sharply by 58%. Ho Chi Minh City is the market with the strongest increase in demand for renting dormitories.
According to the statistics, the number of listings for renting dormitories in Ho Chi Minh City increased by 6%, while the demand for renting dormitories increased by 12% compared to the previous month. Many dormitory landlords, and those who rent out dormitory rooms in Ho Chi Minh City are also preparing to increase rent prices.
Explaining this trend, Mr. Giang Anh Tuan – Director of Tuan Anh Real Estate Exchange – analyzed that apartment prices are currently increasing, causing many people to give up their dream of buying a house. Instead, they have a tendency to rent a house. This makes apartment rental prices increase recently.
However, when housing costs increase, but people’s income does not increase, and many families even experience a decline in income due to common difficulties of the economy, they will be forced to look for other housing solutions with lower costs, and suitable for their family income.
“Compared to apartments, the high-end dormitories are currently attracting a lot of customers. The dormitories with an area of about 40 – 50m2 now have rental prices equivalent to 2/3rd, or even half, the price of an apartment, suitable for the income of many families,” Mr. Tuan said.
Furthermore, Mr. Tuan said that these rented dormitories are closed with full beds, wardrobes, internet, and even air conditioning, refrigerators, and many other smart electronic devices…
“If you only look inside the house, it is not inferior to apartments. The only difference is that apartments usually do not have space, and surrounding landscapes as well as facilities like supermarkets, restaurants, cafes, etc… However, at the time when rental prices increase, this is still the best choice for many low-income families,” Mr. Tuan affirmed.
