Demand for rental homes in Vietnam increased by nearly 60% in a year as rents hit a record high

Demand for rental homes across Vietnam has jumped by nearly a quarter in a year. While Hanoi's sales market is down by 3% compared to the first quarter of this year, Hanoi demand for rental homes is up by nearly 58%.

Overlook of demand for rental homes in Hanoi

According to the research found by bdstanlong.com, apartments for rent in Hanoi are the most interesting, up about 13% quarter-on-quarter.

Specifically, in the first two quarters of 2022, Ho Chi Minh/Hanoi apartments for sale increased by double or triple prices, depending on the segment. The cost of Hanoi apartments for sale jumped by 15% to 15.5% over the same period last year. 

Along with that, leasing fees of rental apartments in Hanoi increased, especially apartments for rent in Tay Ho, Ba Dinh, and Cau Giay, which went up sharply from 14 to 16% compared to the previous quarter.

For townhouses/shophouses, the current rental yield has recovered well, close to the yield in 2019 (before the COVID-19 pandemic). Notably, in 2019, the rental yield of Hanoi townhouses was 3.2 %/year, and in 2021, it was 2.5%. But in the first nine months of this year, the average townhouse yield went up by more than 3 %/year.

Reasons for Hanoi rental prices in the upward trend

Industry insiders said the reason for the sharp increase in the rental price of apartments or land is facing a shortage of land funds for housing. Hanoi is Vietnam's political, economic, cultural, and social center. Therefore, many people from other provinces or countries choose Hanoi as a precinct to settle down, leading to the increasing demand for rental homes. But the land fund remains unchanged.

Therefore, Hanoi rental prices are on an upward trend currently, and the average leasing fees of Hanoi apartments jumped up 1.5 - 6.5 million VND/apartment/per month.

Moreover, the escalation of raw material prices also causes rental prices to go up. According to statistics:

• - The current steel price on the market is 45% higher than at the end of 2020. 
• - Gasoline prices jumped by 30%-40% against early 2021. 
• - The input materials for the construction industry also continuously reached new high costs, such as building bricks increased by 12%, cement increased by 5%-17%, and sandstone increased by 5%-22%. 
• - Meanwhile, the construction cost of an apartment project accounts for about 60% total cost. So when the price of construction materials goes up, it will impact the selling price of the apartment and the rental price.

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