(Comprehensive report from Hanoi on the 20th) Housing prices in Vietnam's capital, Hanoi, have been climbing for years, driving rental costs ever higher and making it unaffordable for many wage earners, forcing them to move to the suburbs or even return to their hometowns.
According to online media outlet VnExpress, in the past year, the prices of many new apartment projects have surged by 40% to 50%. Most landlords have also raised rents, with increases ranging from 10% to 15%, and some even reaching 20%.
Hoang Phuc from Thai Nguyen province, who rents an apartment in Hanoi with his wife, has had to move twice in a year due to rising rent. He said that the landlord first used furniture upgrades as a reason to raise the rent from 9.5 million Vietnamese dong (about 464 SGD) to 11.5 million dong, then increased it again by 15% due to rising housing prices, forcing them to move once more.
The Vietnam Association of Realtors pointed out that currently there are no apartments in Hanoi’s city center with a monthly rent below 10 million dong. One-bedroom apartments generally rent for 10 to 15 million dong per month, while two-bedroom apartments range from 15 to 20 million dong.
As for the suburbs, rents are relatively lower, but on average still range between 6.5 million and 15 million dong, nearly double what they were five years ago. Real estate information platform Batdongsan data shows that overall rents have increased by 10% to 15% year-on-year, with some areas seeing hikes as high as 20%.
According to 'Investor' magazine, in big cities such as Hanoi and Ho Chi Minh City, the prices of newly built apartments have now fully exceeded 40 million Vietnamese dong per square meter (about 182 SGD per square foot), and low-cost housing has almost disappeared.
Real estate firm Avison Young analyzed that more people are choosing to rent because it is difficult to buy a home, and the development of industrial parks is bringing in more migrant workers, which has further fueled demand for rentals and driven up rents.
Nguyen Van Dinh, chairman of the Vietnam Association of Realtors, stated that high rents are hitting young families especially hard, with many spending 30% to 50% of their income on rent, forcing them to either downsize or move to the suburbs.
He suggested that the government draw lessons from Singapore by implementing public rental housing and pre-purchase housing schemes, to provide more affordable housing choices for young people, single individuals, and skilled workers.