Rising Apartment Rental Prices Drive Tenants to Opt for Smaller or Farther Units to Save Costs

Rent prices are on the rise in Hanoi, forcing tenants to make compromises when it comes to the size and location of their apartments in order to cut costs. This trend has been observed by many young individuals who are struggling to find affordable housing in the city.

Increasing Rental Prices Create Challenges for Tenants

Nguyen Hoang, a resident of Hanoi, shared his experience of having to change his living arrangement due to soaring rental prices. Last year, he rented a spacious 30m2 apartment in Hoang Mai district for 5.5 million VND per month. However, when he renewed his lease in May, the landlord increased the rent to 6.5 million VND per month.

Since Hoang lives alone and doesn’t require a large space, he decided to move to the Thanh Xuan area and rent a mini-apartment with an area of about 25m2 for 4 million VND per month. Recently, he received a notice from the landlord about an upcoming rent increase of 500,000 to 1 million VND.

A survey conducted among young renters in Hanoi reveals that rental prices in central districts have significantly increased. On average, tenants are now paying between 4.5 and 7 million VND for a 25-30m2 apartment. Some units with additional amenities can even cost up to 9-10 million VND per month.

Similarly, Thu Ha, a 23-year-old working professional in Hanoi, shared her struggle with rising rental prices. She and her friend have been sharing a 60m2 apartment with two bedrooms in Nam Tu Liem district since the beginning of 2023, paying 8.5 million VND per month. As their one-year lease is coming to an end, the apartment owner called them to renegotiate the contract and mentioned an increase in rent to 10 million VND.

Ha and her friend are currently negotiating with the landlord, but they are considering the option of finding a smaller apartment within the same area or moving to a dormitory to reduce expenses.

Many real estate agents in Hanoi have noticed that despite the overall stagnant market, the mid-range apartment segment remains active, with prices continuing to rise. As many families cannot afford to buy a property, they are resorting to renting. The high demand for rental apartments is driving up prices.

Rent Prices Expected to Continue Increasing

According to a survey conducted on real estate listing websites in Hanoi, rental prices for mid-range apartments in the range of 10-20 million VND have significantly increased within the past year. For instance, Golden Field My Dinh apartments in Nam Tu Liem district have seen a 4% increase compared to the same period last year. The current average rent for this apartment complex is 14 million VND per month, while it was 10-13.5 million VND per month at the beginning of 2023.

Other apartment complexes, such as Anland Nam Cuong in Ha Dong district and Gamuda in Hoang Mai district, have also experienced a rental price increase of 1-2 million VND per month, depending on the size and furnishings of the units.

In Thanh Xuan district, the popular Royal City apartment complex had an average rent of 20 million VND per month at the beginning of 2023. However, the current average rent has risen to 22.9 million VND per month, representing an increase of over 10% within a year.

Similarly, the Imperia Smart City apartment complex in Nam Tu Liem district has also seen a 10% increase in rent within the past year. The average rent at the beginning of 2023 was 8 million VND per month, but it has now reached more than 10 million VND per month, depending on the unit’s furnishings and size.

Real estate agent Long Le has noticed that rental prices for apartments in Nam Tu Liem district have been steadily increasing over the years. He suggests that the current rental prices, particularly at the end of the year and before the Lunar New Year, are still reasonable because many tenants move out and vacate their apartments during this period. However, he predicts that rental demand will significantly increase in April and May due to a large influx of students coming to Hanoi for studies. As a result, rental prices are likely to go even higher.

According to a Consumer Sentiment Survey by Batdongsan.com.vn, the leading reasons for renting instead of buying property in the second half of 2023 were “unaffordable property prices,” accounting for 29%, and “insufficient funds to buy property,” accounting for 26%. However, in the first half of 2024, “insufficient funds to buy property” became the main reason for choosing to rent, accounting for 33%.

The growing trend of renting instead of buying property is driven by financial constraints. Among the various options, apartments remain the most popular choice (43%), followed by private houses (18%) and shared dormitories (18%).

Given the rising demand for rental apartments, it is expected that rental prices will continue to increase in the coming years. To alleviate financial pressure and reduce rental expenses, tenants are advised to consider smaller apartments or those located farther from the city center.

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