Mini-apartments are no longer a lucrative business.

Many people are hesitant to choose mini-apartments.

Ms. Huong (Ward 13, Tan Binh District) is asking a real estate agent to sell her 30m2 mini-apartment, which includes one bedroom, kitchen, living room, and bathroom. She bought it two years ago for nearly 1 billion VND. She was very satisfied with the location, as it was close to her workplace and within her budget. However, the recent mini-apartment fire in Hanoi has haunted her. After much deliberation, she decided to put her apartment up for sale at 950 million VND.

“The apartment I’m currently living in is in a relatively good location, but I’m still worried about fire safety, so I’ve decided to sell it. For now, I’ll rent a temporary place to live, and when I find another apartment with a better fire safety system, I’ll buy it. It might cost a lot of money, but I’ll borrow more. However, real estate agents say it will be very difficult to sell at this time because many customers are currently afraid of mini-apartments. To sell it, I’ll have to lower the price significantly,” Ms. Huong shared.

Like Ms. Huong, last month Mr. and Mrs. Hai (currently renting in Go Vap district) considered buying a mini-apartment for their family to settle down, as Mr. Hai was tired of renting. However, they have now changed their minds and will continue renting. Mr. Hai plans to save up more money and then next year look for an apartment on installment in commercial projects or buy social housing.

Ms. Hang (owner of a mini-apartment building for rent on Nguyen Trai Street, District 1) said: "In recent days, many tenants have returned their rented apartments, including many whose lease contracts were still valid but they terminated their contracts and accepted losing their deposits. Although they didn't state the reason, I know the mini-apartment fire in Hanoi has affected the psychology of many customers. Previously, my mini-apartment building was always fully occupied, but now there are many empty rooms. I am currently equipping and investing in a fire protection system that meets standards for the mini-apartment building, hoping that tenants will return."

According to big data from Batdongsan.com.vn, in the first eight months of 2023, the demand for renting and buying apartments under 35m2 in Ho Chi Minh City increased by 24% compared to the same period last year. Apartments under 35m2 are typically studios in large projects or mini-apartment buildings, which attract customer interest due to their affordable prices and ease of resale and rental. However, following the recent unfortunate mini-apartment fire in Hanoi, the mini-apartment market has been significantly impacted.

Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, commented that the next phase will be very difficult for those running mini-apartment businesses as well as those buying/renting this type of property, because authorities will review projects not only in Hanoi but nationwide. This move will force many mini-apartment owners to temporarily suspend their businesses because they have not complied with strict fire safety regulations. They will lose a lot of time and money on repairs to meet the operating requirements of the apartment building. For tenants, they may terminate their leases and find new accommodation if their current place of residence is not safe.

Forecasting the future of the apartment market, many experts believe that the supply of apartments is likely to decrease in the coming period. This is because project developers will find it more difficult to obtain construction permits and launch sales as fire safety and rescue management and inspection are intensified; construction and operating costs will increase according to design and acceptance procedures and maintenance in compliance with fire safety regulations. Demand for mini-apartments may also decrease.

Experts suggest that instead of searching for mini-apartments in densely populated areas, buyers will gravitate towards social housing projects and apartment projects located further from the city center but offering better safety and more affordable prices compared to inner-city apartments. The supply of these types of housing is limited, so prices may gradually increase as demand rises. Furthermore, smaller apartments in apartment projects by reputable developers, with fully certified fire safety systems, will attract greater interest.

Lawyer Dao Xuan Son from the Ho Chi Minh City Bar Association recommends that those intending to buy mini-apartment units should carefully and comprehensively examine the building to ensure legal safety and protect their rights. This includes considering land use rights, construction documents, design, construction quality, the developer's capabilities, and the conditions for obtaining a "certificate of ownership" from the competent authority as stipulated by law. Furthermore, buyers should verify that the apartment building meets all requirements according to the construction permit, especially regarding fire safety, as these buildings often have multiple floors and limited space, making it difficult to ensure maximum safety in case of an emergency.

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