Rents in Ho Chi Minh City increase sharply due to lack of new supply

Looking for a place to stay for over a month now, Ms. Ha Thu - a worker at Tan Binh Industrial Park said that the rental prices of boarding houses have increased significantly compared to last year. For example, in the place where Ms. Thu is staying, a 25m2 room that costs 3.5 million VND/month has now increased to 4 million VND/month. Along with parking, electricity and water services, Ms. Thu has to spend about 6 million VND/month for accommodation.

"This room is for 3 people, each person will have to pay 2 million/month for accommodation. However, that cost is still quite high because this room is cramped, stuffy and has many other limitations, so I am looking for another place to stay. But for more than a month now, suitable accommodations have increased prices or are full, so our group has not found a new place to stay," Ms. Thu shared.

Many cheap motels are also increasing prices following the market's growth.

Similarly, Mr. Tuan Hung - a motorbike taxi driver - is also paying 2.3 million VND/month for a rented room of less than 20 square meters in Binh Chanh district. Previously, this rented room was only priced at 2 million VND/month, but after nearly 1 year of renting, the landlord increased the price when realizing the increasing market demand.

Mr. Hung said: "With an income of about 10 million VND/month, increasing the price by a few hundred thousand VND/month is also a significant number for me. I am planning to switch to renting at dormitory and sleepbox models to reduce rental costs. Because some models have similar prices but include electricity and water, they are more suitable for my needs."

The situation of high rental prices has also been recorded in many other areas in Ho Chi Minh City, affecting many residents who do not own a house and are renting in boarding houses, serviced apartments or more luxurious apartments for rent. But in general, the increase in housing prices is "hot" locally in areas with high demand such as near industrial parks, schools, and office buildings.

The rental market report of Batdongsan.com.vn also shows that in March 2024, the demand for rental housing in Ho Chi Minh City is showing signs of rapid recovery. In particular, the number of searches for apartments in Ho Chi Minh City increased by 29%, rental housing in Ho Chi Minh City increased by 33%, private houses increased by 45% and townhouses increased by 86%. The areas with the highest demand for rental housing in Ho Chi Minh City are Tan Phu (increased by 55%), Tan Binh (increased by 41%) and District 7 (increased by 42%).

Although the demand for rental housing decreased slightly by 2% in April 2024, compared to the same period last year, the demand for rental housing still increased by 5% compared to the same period last year. In particular, the demand for rental housing increased by 6% compared to the previous month.

New serviced apartment products launched on the market also recorded rental prices 15-20% higher than old buildings.

In addition, the real estate consumer psychology report of Batdongsan.com.vn also shows that the demand for renting apartments is increasing sharply as many young people are shifting from trying to save up to buy a house to renting a long-term house, partly due to the pressure of rising house prices in recent years. This trend is concentrated in the apartment type, accounting for 43%, followed by private houses and boarding houses (both accounting for 18%). In addition, the floating interest rate for home loans according to the market is still quite high, making many middle-income people almost afraid to borrow to buy a house and unable to choose a suitable product.

“If in the second half of 2023, the factor of not having enough money to buy a house accounted for 26% of the reasons for renting, then in the first half of 2024, not having enough money to buy a house became the main reason why people chose to rent a house, accounting for 33%,” said Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn.

This expert also believes that, in the context of the high price of apartments increasing by 30-40%, real buyers and investors will often have a wait-and-see mentality and turn to pay more attention to the rental real estate segment. Meanwhile, the rental apartment and boarding house segment is meeting the needs of workers, students, industrial park workers, etc., which account for a large proportion of workers in cities. High demand causes the rental price of this segment to increase significantly, putting pressure on tenants. To overcome financial difficulties, tenants need to proactively find boarding houses and apartments with smaller areas or located far from the center, etc.

Source: https://www.congluan.vn/gia-thue-tro-tai-tp-hcm-tang-manh-do-thieu-hut-nguon-cung-moi-post297173.html