Struggling to get by
Ms. Tran Thi Lien (3rd year student, Academy of Journalism and Communication) shared that after the landlord announced an increase in the rent by 300,000 VND/month (from June 2024), she had to find extra jobs during the summer vacation to increase her income and cover her living expenses.
According to Ms. Lien, the rent for a room is only 2.5 million VND/month, but when adding the accompanying living expenses such as service fees, electricity and water, at the end of the month it will add up to more than 3 million VND/month. The landlord's increase in rent after adding a fire protection system has put pressure on many renters like Ms. Lien, some of her friends in the same room have had to post ads looking for roommates to save costs.
Even though she has a stable job, Ms. Nguyen Thi Minh Anh (born in 1995, a communications employee in Hanoi) still feels dizzy when the landlord announced an increase in rent by 500,000 VND/month after adding a fire protection system and an outdoor fire escape.
With a salary of 10 million VND/month, Ms. Minh Anh mentally calculated that each month she would have to pay for rent, electricity, water, and service fees of nearly 4 million VND. If she spent sparingly, excluding food, gas, and transportation, she would only be able to save 2-3 million VND/month.
Measures to cool down inner city rental prices
According to a survey by Lao Dong reporters, many landlords in central districts of Hanoi such as Cau Giay, Dong Da, Hai Ba Trung, Thanh Xuan have recently increased their rental prices by 10-15%. The main reasons they gave were high investment costs due to additional furniture, rooms that can accommodate more people (thanks to dividing the space), the upcoming new school year, adding fire protection systems, fire escapes, etc.
Data from the Batdongsan.com.vn website recently showed that the demand for rental housing in Hanoi on this platform has increased by about 29% compared to the beginning of 2024. Some central districts such as Ba Dinh, Long Bien, Thanh Xuan are currently experiencing high search rates and rental prices.
Mr. Dinh Minh Tuan - Sales Director of Batdongsan.com.vn - commented that the rental price of boarding houses and rooms in Hanoi is increasing, the main reason is because after the summer vacation, students start school, and the demand for boarding houses increases.
In addition, in the recent period, there have been many issues related to fire safety that landlords have had to respond to, so the cost of installing and purchasing equipment will be included in the rental price, which also partly causes the supply of rental housing in the inner city to gradually decrease. The problem of increasingly limited supply along with a certain differentiation in the demand for rental housing will also cause rental prices in this segment to tend to increase from now until the end of 2024.
Referring to this content, Mr. Nguyen The Diep - Vice President of Hanoi Real Estate Club - informed that since the end of 2023, the apartment and real estate segment has established a new level, causing the prices of buying, selling, renting, and boarding houses to also increase.
Mr. Diep said that, according to tradition, August and September are the months when many new students go to Hanoi to enroll and return to school, a large number of students flock to the capital, causing a shortage of rental rooms.
In addition, many landlords tend to invest in and equip more comfortable furniture and fire protection systems to attract tenants, causing rents to suddenly increase.
Need more control mechanisms in land auctions
According to Mr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, in order for auction activities to take place transparently and to increase revenue for the budget, the State needs to soon have additional mechanisms to control speculative activities.
It is necessary to change people's thinking about housing, so that housing is a place to live, solving people's living needs, not an accumulated asset. By imposing taxes, targeting those who accumulate and speculate instead of those who buy real estate for living purposes or to organize production and business, the accumulated asset factor will be reduced. The tax rate can be gradually increased for real estate transactions where the seller has a short holding period or if the real estate owner does not put the real estate into business activities, does not carry out construction after receiving the land... Taxing real estate in the right direction will limit or eliminate the motivation for people to speculate in real estate because along with interest costs and other opportunity costs, owning speculative real estate becomes riskier. Buying and selling real estate to make a profit, or creating virtual supply and demand to inflate real estate prices gradually becomes meaningless. Idle money in the people will therefore be channeled into production and business sectors, creating products and added value for society. This will help the real estate market develop more healthily and effectively in the long term, instead of land fever and price disturbances. Tuyet Lan
