Survey results from Batdongsan.com.vn show that the rental market is entering a growth cycle due to peak season factors and pressure from selling prices.
In the first 9 months of 2024, selling prices have gradually increased, creating pressure on rental prices to increase as well.
Up to now, apartment rental prices continue to increase sharply, at 8 - 15 million VND/month in Hanoi. There are even apartments located in the central area with rental prices from 20-30 million VND.
The recent increase in apartment rental prices is explained by many investors as the continuous increase in apartment prices causing many people to give up their dream of owning a home. Instead, the trend of renting is becoming more popular.
Having worked in the rental apartment business for nearly 12 years, during the market downturn, Mr. Vu Duc Quang (in Cau Giay district, Hanoi) considered selling 2/5 of his apartments to reinvest.
According to Mr. Quang, in the period 2014-2018, the rental housing segment peaked with an average profit rate of 6-8% (equivalent to bank deposit interest), and property values also increased rapidly. However, rental prices began to decline from the end of 2019 and began to "plummet" when the pandemic swept through.
By 2021, when the COVID-19 pandemic broke out, many rental apartment complexes were almost empty, and profits even dropped to 0%. At that time, very few investors were able to stay, and those who did have good results have now.
Sharing the same opinion that the rental apartment segment has passed the bottom, Ms. Bui Thi Thu - a broker specializing in rentals in Thanh Xuan district (Hanoi) - said that this segment is now almost back to pre-pandemic levels.
The current difficulties, if any, only occur with investors who use too much financial leverage, the rental income is not enough to pay interest, while they cannot sell at the right price to get rid of the goods, forcing them to sell at a loss. For investors using idle money, most are benefiting because the growth rate is quite good.
“Most of the apartment complexes for rent associated with us currently have an occupancy rate of over 90%, and there are almost no policies to support tenants. The rental price of a mid-range apartment is currently around 10 - 15 million VND/month,” said Ms. Thu.
Meanwhile, experts from the Vietnam Association of Realtors (VARS) said that apartment rental prices have increased relatively strongly in recent years, bringing a profit margin twice as high as that of townhouse rentals.
If in the past, most people thought that apartments were a type of unprofitable trading, only causing losses, and only chose to invest in residential real estate, now, investing in apartments and then renting them out has become a popular trend in big cities.
Accordingly, investing in apartments could become the main trend in the real estate market in the last quarter of 2024 and is forecast to return to the period of double profits in the coming years.
It can be seen that in the context of the limited ability of young families to buy houses, the rental housing segment is a good choice for investors. However, experts advise not to "put all your eggs in one basket".
