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Young Family’s Struggle: Selling Their Home to Escape Debt, Now Seeking an Affordable Rental in Ho Chi Minh City

26 March, 2025

The Challenges of Finding Affordable Rental Apartments

Three years ago, after saving up 2 billion VND, Ms. Hong Thu’s family from Thu Duc City, Ho Chi Minh City, decided to purchase an apartment in Linh Dong Ward for 3.5 billion VND. To buy their first home, Ms. Thu and her husband had to take out a bank loan of 1.5 billion VND.

According to Ms. Thu, during the two-year interest rate incentive period, the couple had to pay more than 10 million VND per month. At that time, their jobs were stable, and their income was good, so they managed to get by. However, when the interest rate floated, they had to pay about 15 million VND per month.

“Last year, both of our incomes decreased. Although we tried to save on living expenses to repay the debt, we couldn’t keep up anymore,” said Ms. Thu, explaining why they sold their apartment. For now, the young couple plans to rent another apartment instead of buying one. However, finding a rental apartment is not an easy task.

Apartment buildings along Pham Van Dong street in Thu Duc City. Photo: Anh Phuong

Ms. Thu shared that two years ago, a two-bedroom apartment in an old apartment building on Pham Van Dong street rented for 6 million VND per month. Currently, the rent has increased to 7.5 million VND per month. As the apartment building is over a decade old, the rent here is the cheapest in the area. Apartments with two bedrooms in nearby buildings rent for a higher price, ranging from 8 to 9.5 million VND per month.

“After considering our options, we decided to rent an apartment for 7.5 million VND per month, with a one-year contract. The landlord mentioned that the price wouldn’t be the same next year, and if we wanted to renew the lease, we would have to sign a new contract with an increased rent,” Ms. Thu shared.

Ms. Minh Ha, a resident of Hiep Binh Phuoc Ward in Thu Duc City, is looking to rent a more spacious apartment closer to the city center for her family’s convenience in commuting and taking her two children to school.

After exploring various options, she chose to rent a three-bedroom apartment in an apartment building on Dien Bien Phu street in Ward 25, Binh Thanh District, for 22 million VND per month.

“Since our children are growing up and need their own space, a two-bedroom apartment wouldn’t be suitable. The rent for this type of apartment in the same area is 16 million VND per month,” Ms. Ha said.

According to the journalist’s survey, the most significant increase in apartment rental prices in Ho Chi Minh City was observed in apartment buildings located along the metro line 1. Since the operation of the city’s first electric train line, rental prices in nearby apartment buildings have increased by 7-10% compared to before.

Data from a market research unit shows that the rent for a two-bedroom apartment in some old apartment buildings in District 2 ranges from 17 to 29 million VND per month. In a few luxury apartments, the rent for this type of apartment has even increased by more than 10% compared to the same period last year.

Reasons for the Surge in Rental Apartment Prices

Commenting on the real estate market, Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, said that selling prices have continuously increased over the years and remain high, exceeding the affordability of a large number of middle and low-income earners in urban areas.

Mr. Chau believes that selling prices are unlikely to decrease in the short term, and one of the main reasons is the hundreds of real estate projects that are facing legal procedure obstacles that have not been resolved.

Rental apartment prices along the metro line 1 have increased significantly. Photo: Hoang Ha

According to Mr. Vo Hong Thang, Investment Director of DKRA Group, as selling prices of apartments continue to rise, so do rental prices. From an investment perspective, the profit margin for renting out an apartment is expected to be around 5% per year.

Mr. Thang further explains that as rental prices along the metro line 1 tend to increase, the market will witness a polarization among tenants. The first group will opt for apartments farther from the metro line to stay within their financial means.

The second group consists of tenants who can afford the financial burden but face a choice between renting closer to the metro for convenience or renting farther away to save costs.

Despite the upward trend in rental apartment prices in Ho Chi Minh City, Ms. Giang Huynh, Director of Research and S22M at Savills Vietnam, believes that the profit margin from this type of business is decreasing. She attributes this to the rising selling prices of apartments.

According to Savills Vietnam, the current profit margin for renting out apartments in Ho Chi Minh City ranges from 3-6% per year, significantly lower than before. However, when investing in rental apartments, investors consider not only this factor but also the potential for real estate value appreciation.

Anh Phuong

– 06:00 22/03/2025