Wages increase, housing prices also increase, tenants are fed up with their place to live

1001 reasons to increase rental prices

As soon as there was information about the increase in the basic salary, Mr. Le Manh Quoc (25 years old, Thanh Hoa) received a notice from the landlord about the increase in rent from July 1, 2024. The apartment Mr. Quoc is currently renting for 6.5 million VND/month, paying rent every 3 months, the price has been increased to 7 million VND/month with the reason "when salary increases, rent also increases".

As an office worker, Quoc is currently renting an apartment in a collective housing complex located on Nguyen Huy Tuong Street, Thanh Xuan District, Hanoi. In addition to the rent, Quoc needs to pay an additional 2 million VND per month for electricity, water, and service fees.

Although the house price has increased, Mr. Quoc said he still feels lucky because the landlord did not increase it too much, the above price divided among 5 people in the family is already very reasonable. Another part is because when consulting neighboring areas, Mr. Quoc said that the house prices have skyrocketed, it is very difficult to find a similar apartment with the above "goodwill" price.

Not as lucky as Quoc, Ms. Nhu Quynh (23 years old, Hai Duong) just received a notice from the landlord on June 25 that she had to move out from July 1, because the apartment she was living in was temporarily suspended because it did not meet fire prevention and fighting conditions after a local inspection.

Time was pressing, Ms. Quynh was shocked when she went to look for a house and learned that house prices on the market had increased a lot after only a few summer months.

The reason that Ms. Quynh received the most from landlords and brokers is that currently the number of apartments that meet fire prevention and fighting conditions to be licensed for rent is not much, not to mention that apartments that meet fire prevention and fighting conditions must spend money to prepare fire prevention equipment according to regulations, so this fee will be added to the rent, causing house prices to escalate.

Inside a closed apartment in My Dinh that is being rented for 4.5 million VND/month.

There were apartments that she was still hesitating about, but the next day she called and someone else had already paid a deposit to rent, so Ms. Quynh had to immediately close a mini apartment in My Dinh, Hanoi with a price of 4.5 million VND/month. The house has basic furniture, enough for 2 people to live in with a living room, kitchen, bedroom, and private bathroom.

In addition to the rent, Ms. Quynh also has to pay monthly electricity bills of 4,000 VND/kWh and water bills of 100,000 VND/person, not to mention service fees such as cleaning, internet, management, etc.

Similarly, Ms. Nguyen Thi Thu Huyen (28 years old, Hoa Binh) has just had her landlord add a bed, wardrobe and build an emergency escape ladder in the apartment she is living in.

Thinking she would get more benefits, right when the contract expired at the end of the month, Ms. Huyen received a notice from the landlord about an increase of 1 million VND/month in rent. The reason given by the landlord was that the apartment now had additional amenities and "the market price is like that now".

While her income has not increased, and even tends to decrease due to the recession, Ms. Huyen said that now she cannot stay or leave because it is very difficult to find a cheap apartment at this time, not to mention that transportation currently costs a lot of time and money, so she has to accept the price increase.

Rental prices continue to rise

Mr. Nguyen Duc My (58 years old, Hanoi), owner of a row of boarding houses in Dinh Cong, Hoang Mai, Hanoi, confided that the boarding houses have increased their prices based on the rising demand of the market and the increasing trend of apartment rental prices.

Especially after the recent inspection, his family had to spend a lot of money to upgrade services and utilities to ensure the safety of the rental room, so the rent had to increase to compensate for the above costs.

Most real estate brokers operating in the rental sector told Nguoi Dua Tin that rental prices will continue to increase steadily in all segments following the upward trend of real estate prices in the buying and selling market.

In particular, the 25-30m2, closed rooms in central districts will have the strongest price increase due to high demand and abundant guests.

The housing market is extremely vibrant.

Mr. Tran Hoang Nghia (26 years old, Hanoi) is currently a broker for 4 boarding houses located in Linh Dam, Le Thanh Nghi, Chua Lang and My Dinh, all of which are areas near universities with the majority of tenants being students. Mr. Nghia said that from August 2024, the apartments will continue to increase in price by about 10% because "the peak season has arrived".

"When students come to study, the rooms will definitely be full. At that time, we are only afraid of not having houses to rent, not of lacking tenants," Mr. Nghia affirmed.

According to Nguoi Dua Tin , the current price of closed boarding houses in central areas of Hanoi ranges from 2-4 million VND/apartment for 1-2 people to live without furniture. For mini apartments, the price ranges from 4.5 - 7 million VND/unfurnished apartment, and apartments for rent range from 12-18 million VND/apartment with 2-3 bedrooms, including some basic furniture.

Boarding houses with rental prices under 2 million VND/unit are almost extinct in the central area boarding house market. Moving to the suburbs, although boarding house prices are somewhat more “affordable”, the difference is insignificant, only a few hundred thousand compared to inner city areas.

What is the reason for the price increase regardless?

VARS research data shows that apartment rental prices in Hanoi have increased relatively strongly in recent years, especially in the studio type (1-bedroom apartments) with profit margins up to twice as high as those of larger apartments.

Specifically, in Long Bien district, studio apartments are being rented at a price of 7-8 million VND/month, an increase of 10-15% compared to the same period last year and about 30-40% compared to 2022. 2-bedroom apartments, fully furnished, have a higher price, with a lower increase of about 10% compared to the same period, up to about 10-11 million VND/month.

At the Greenbay Me Tri project (Nam Tu Liem), fully furnished studio apartments are currently being offered for rent at around VND10 million, while two-bedroom apartments range from VND14-16 million, up about 15% over the same period. Rental prices for apartments in other districts have also recorded similar increases.

Statistics from the Batdongsan website in the first quarter of 2024 show that the rental apartment market in Hanoi has been increasing sharply in price recently. In particular, the rental price of Hanoi apartments in Nam Tu Liem district increased by 8%, Cau Giay increased by 7%, Tay Ho increased by 7%, and Bac Tu Liem increased by 8%.

VARS Chairman said that people's demand for housing is still on the rise.

According to VARS Chairman Nguyen Van Dinh, renting a house is chosen by many families, when high apartment prices make home ownership increasingly difficult for the majority of people.

In particular, home loans and monthly debt repayments remain a burden for many families as people are not really confident in their future jobs and incomes due to the volatile economic situation.

Therefore, “Rental demand is still on an upward trend while available supply is lacking due to the continuous decline in housing supply, especially apartments, causing rental prices to increase,” Mr. Dinh affirmed.

Mr. Dinh also forecasted that rental prices will continue to increase but at a slower pace. The outlook for the apartment rental market is becoming clearer as production and business activities are gradually recovering, leading to a large demand for housing in large cities.

To solve the above situation, Mr. Dinh said that the core issue is still to solve the problem of apartment supply to provide a place to live for a large group of people who are in need of owning a house, thereby reducing the burden on the rental housing segment, from which we can gradually bring rental prices to a stable level .

Source: https://www.nguoiduatin.vn/luong-tang-gia-nha-cung-tang-nguoi-thue-ngan-ngam-vi-chon-an-cu-a671137.html