Landlords complain about low occupancy rates.
Having posted an advertisement for her apartment in Cau Giay District ( Hanoi ) since last December, Ms. Nguyen Thi Hien has yet to find a tenant. The previous tenant vacated the apartment just before the Lunar New Year, making it difficult to find a new one. Ms. Hien said she has posted the rental ad on many real estate websites, but has received almost no inquiries.
This has affected Ms. Hien's monthly income. Furthermore, even though she can't rent out the apartment, Ms. Hien still has to pay monthly service fees.
Many landlords and property owners admit that it is very difficult to find tenants during the period leading up to the Lunar New Year.
Regarding this phenomenon, some real estate brokers cite the main reason as low demand for retail space due to difficult business conditions. Meanwhile, a large number of properties that did not sell at expected prices are shifting to rentals, both to generate additional cash flow for owners and to weather the end of the year while they continue to look for buyers after Tet (Lunar New Year).
A house on Ba Trieu Street (Hanoi) has a "For Rent" sign (Illustrative photo: Ha Phong).
A recent real estate market report from a firm shows that the number of rental property listings across the site increased by 21% compared to the previous month and 2% compared to the same period last year. The product with the most rental listings last month was boarding houses, with a 58% increase compared to the previous month.
In contrast to rental demand, the demand for renting real estate has not improved, continuing its downward trend of 6% compared to the previous month and 14% compared to the same period in 2022. The downward trend in rental demand is strong across all property types, including apartments, detached houses, townhouses, and shops, with decreases ranging from 5-14% compared to the previous month.
Notably, in Hanoi, demand for rental properties increased, with the number of listings in this segment rising by 7%. However, the demand for rentals continued to decline by 2%. The trend of searching for rentals decreased sharply across almost all property types: Hanoi townhouse rentals fell by 18%, Hanoi apartment rentals by 8%, boarding houses by 15%, and office rentals by 11%.
Waiting for recovery after Tet
According to many real estate experts, the rental market is predicted to face many difficulties this year as the economy is grappling with challenges and the real estate sector still needs time to recover. However, the difficulties will gradually lessen over the months, with growth returning to types of properties that meet the rental needs of the majority, such as apartments and townhouses.
Mr. Dinh Minh Tuan, Director of Batdongsan.com.vn, said that rental apartments and boarding houses will continue to operate stably thanks to the still very high demand for these two types of accommodation.
For apartments, projects located near the city center will still have stable tenants with rental prices ranging from 7-15 million VND/month. As for boarding houses and rooms for rent in the city center, demand remains very high, especially among office workers, young laborers, and students.
In suburban areas, rental rooms near industrial zones will continue to be in high demand thanks to the return of the workforce after the Tet holiday. Meanwhile, rental housing near universities will remain a popular choice for students.
A row of townhouses with "For Rent" signs in Ha Dong district, Hanoi (Photo: Ha Phong).
Mr. Tuan predicted that the demand for rental properties will increase after Tet (Lunar New Year), but rental prices may not fluctuate significantly. There might be a slight increase in rental prices for some types of properties, but it won't be too high. Specifically for townhouses and shops for rent, prices are likely to remain stable in the first few months of the year due to the ongoing economic difficulties.
According to Ms. Trinh Thi Kim Lien, Business Director of Dat Xanh Services, 2023 saw a shift in consumer behavior, with people moving from buying to renting homes amidst an unrecovered economy, scarce housing supply, and high prices. This shift led to increased demand for rental housing.
However, there is still a differentiation among types of rental housing. Low-end housing and worker housing are largely vacant and difficult to rent, while mid-range and higher-end rental apartments maintain good absorption rates. "The closer the housing is to the city center, offices, schools, and supermarkets, the more sought-after it is and the higher the rental price," Ms. Lien observed.
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