Apartment rental market in suburban areas of Ho Chi Minh City heats up at the end of the year

According to research by Batdongsan.com.vn, since the beginning of the fourth quarter of 2023, the rental market has experienced significant fluctuations with increased interest across all segments. However, small apartments with an area of less than 35m2 have received the most attention.

The shift in interest in these types of apartments is attributed to fluctuations in rental prices. Recently, rental apartments and serviced apartments in the city center have seen significant price increases, while some other rental properties remain at high prices.

A survey by Batdongsan.com.vn also shows that the average monthly rent in Hanoi for apartments is 13 million VND/month, while for boarding houses it is 3.5 million VND/month. In Ho Chi Minh City, the average rent for apartments is 12.5 million VND/month, and for boarding houses it is 4.8 million VND/month. There is also a significant difference in rental prices between the city center and suburban areas or surrounding regions.

The apartment rental market in the suburbs of Ho Chi Minh City is heating up at the end of the year (Figure 1). — Larger apartment types are recording consistently high prices.

The aforementioned rental prices are quite high relative to income, causing tenants to think twice. In the two major markets mentioned, the majority of those surveyed believe that rental prices should be 20% lower. Only 12-22% believe that current rental prices are reasonable.

With rental prices remaining high, the solutions proposed to address this problem include renting a smaller home (67%), renting in a more remote area (27%), living with more people (20%), renting in an area with fewer amenities (13%), and renting a less furnished home (7%).

Despite the shift in rental demand, most landlords have indicated they will not reduce rents or will only reduce them by less than 10%. This has led to many tenants vacating properties in central areas, and a shift of tenants to suburban areas and neighboring provinces.

Therefore, towards the end of the year, in some central districts, there was a mass vacancy of apartments, especially large apartments with high rental prices, reaching around 20 million VND/month. For example, in Ho Chi Minh City, many areas renting high-end serviced apartments or condominiums continuously had to post advertisements seeking tenants.

Furthermore, in some suburban areas such as Binh Chanh and Nha Be districts, or areas adjacent to Ho Chi Minh City such as Di An ( Binh Duong ), Bien Hoa, and Nhon Trach (Dong Nai), there has been a significant shift of tenants seeking new housing. A portion of these tenants work in Thu Duc City and the central districts of Ho Chi Minh City.

The apartment rental market in the suburbs of Ho Chi Minh City is heating up at the end of the year (Figure 2). — Apartments for rent in suburban areas and neighboring provinces of Ho Chi Minh City attract a large number of customers from the city center.

Apartments for rent in this area are often cheaper, sometimes only half the price of those in the city center. For example, in some apartment buildings on Pham Van Dong Street or in Di An City, the rent for a two-bedroom apartment ranges from only 5-6 million VND/month depending on location and furnishings. In addition, tenants often receive free services as part of a developer's promotional offer. Meanwhile, a similar apartment in the city center could cost 12-15 million VND/month.

Many believe that the trend of tenants moving to suburban areas will continue because rental prices are not expected to decrease in the near future. Furthermore, apartment prices are likely to continue rising in the new market development cycle. This could lead to further increases in rental prices to ensure profitability for landlords.

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