Renting a house becomes a hot keyword, is the real estate market "changing"?
According to experts at the Workshop “Potential of Lease Home apartments”, the Lease Home apartment rental market is vibrant and will continue to grow thanks to the increasing demand of FDI experts, high-tech human resources, successful young entrepreneurs, etc.
“Renting a house” becomes a hot keyword
According to Dr. Vo Tri Thanh, Director of the Institute for Brand Strategy and Competition, renting a house has become a “hot” keyword for both renters – the demand side and investors – the supply side. In particular, the demand for renting a house is formed by 4 main groups, including FDI experts and high-tech human resources; Vietnamese people who need to find a place to live that suits their living, working and studying needs; the young generation – Gen Z with a changing lifestyle, emphasizing flexibility and quality of life and low-income people.
Economist , Dr. Nguyen Minh Phong believes that the group of foreign tenants including experts and high-tech human resources will be the group that has the strongest impact on the market trend of Lease Home apartments.
FDI capital will continue to "flood" into major provinces and cities such as Bac Ninh, Bac Giang, Hai Phong, Hanoi, Ho Chi Minh City, Binh Duong... Vietnam is gradually becoming a manufacturing center, part of the regional and global supply chains of many of the world's leading technology corporations such as Samsung, LG, Intel, Apple, GE, Foxconn... Google will open an office in Vietnam in April 2025 and Nvidia will open an R&D center to develop artificial intelligence applications...
All of this will attract a large number of experts and high-quality personnel to live and work in Vietnam. From there, the demand for housing, especially high-end housing in central areas, will increase sharply.
Dr. Minh Phong also believes that the group of people who need to rent out their houses and rent other places to live to suit their work, study, etc. is an emerging trend and will continue to develop more strongly in Vietnam in the future.
Experts have given conflicting opinions on the potential impact of Gen Z on the market, but they agree on one thing: the rapid increase of the Vietnamese middle and upper class, including the younger generation, also contributes to making the Lease Home segment more vibrant.
Long-term rental in the central core district "dominates the airwaves"
At the conference, experts also affirmed: there are 3 reasons why the trend of long-term leasing in the central core district will "dominate" in the coming time, especially in the capital Hanoi .
Firstly, the demand for high-end housing from a large number of international experts working in Vietnam and a segment of the population is the driving force for the long-term rental serviced apartment segment. The capital Hanoi is always in the top of attracting FDI capital, attracting about 10,000 foreign workers each year, mainly experts and managers.
According to the Vietnam Association of Realtors, in 2024, the supply of apartments in Hanoi will grow strongly with 19,000 products, but the supply of apartments in the central area will remain very scarce. The central area only recorded about 400 products for sale, accounting for 1% of the total supply on the market. Therefore, the average apartment price in the 4 central districts has doubled compared to the beginning of 2019, 30% higher than the average increase in Hanoi as a whole.
This leads to the third reason for the incredible occupancy rate and profitability of apartments for rent in the central core area of the Capital.
Ms. Dinh Thi Nga, Hotel Operations Director - T&T Hospitality said: After the Covid-19 pandemic, in Hanoi and Ho Chi Minh City, the occupancy rate of serviced apartments has always been maintained at 80 - 89%, while the occupancy rate of hotel rooms is only about 68 - 70%.
Sharing about the profitability, Mr. Le Dinh Chung, General Director of SGO Homes said: Serviced apartments are currently the products that bring the highest investment efficiency in the rental segment. Because the rental price of serviced apartments is 35 - 70% lower than apartments with long-term legal status, but the rental price is 25 - 50% higher.
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| Profitability ratio comparison table presented by Mr. Le Dinh Chung at the conference. |
Citing an example of a serviced apartment project in the core area of Hanoi, Mr. Chung said that The Ninety Complex is a rental apartment candidate that can bring in attractive cash flow at present and in the coming years.
This project has an outstanding advantage when located right in the center of Dong Da district, the focal point connecting industrial parks around Hanoi. In addition, with rich neighboring facilities, 5-star hotel standard internal facilities, The Ninety Complex has all the elements to become the leading choice of hotel standard apartments for businessmen and foreign experts when coming to Vietnam.
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| The Ninety Complex attracts customers thanks to its central location and high-class facilities. |
Experts say that to optimize the profitability of Lease Home apartments, investors need to pay attention to the needs of the target customer group. The most important of which are the project location, the values that are worth the money the tenants spend, and the amenities that take care of their lives from material to spiritual. The reputation of the investor and the operating unit is also a plus point to ensure the commercial value of this product line.
In 2025 and the following years, luxury rental apartments are forecast to have strong development to meet the long-term housing needs of international experts, middle and upper class Vietnamese. Investing in rental apartments will bring customers double profits from regular rental cash flow and sustainable added value over time.
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