According to Ms. Nguyen Hoai An, Director of CBRE Hanoi, the market appeared more than the projects with good leasing capacity. These are projects with good quality management and services, fully furnished and convenient for residents and located in convenient locations, thus attracting tenants.
Regarding the newly announced condominium rental market in Hanoi, we had an interview with Ms. Nguyen Hoai An, Director of CBRE Hanoi Branch, about the trend of renting and apartment in Hanoi market.
The transition from renting high-class apartment to mid-level apartment.
With the published reports on the real estate market in the third quarter of 2019 of some businesses, how do you evaluate the trend of renting and renting apartments in Hanoi market?
In terms of location, the area that often attracts rental investors must include the concentrated areas of the foreign community (as potential tenants) such as the Westside, Dong Da, Ba Dinh and Tay Ho area.
Center-point office areas or areas with easy access to office areas such as the Westside, Dong Da, Ba Dinh or the Southern area of Hai Ba Trung district attract young families or people from other localities to Hanoi lives and works.
A number of projects in the eastern part of the city, which have recently witnessed the development of infrastructure as well as connecting inter-provincial roads to industrial parks in neighboring provinces, also attract tenants. foreigners working in nearby industrial zones.
A number of projects in the eastern part of the city, which have recently witnessed the development of infrastructure as well as connecting inter-provincial roads to industrial areas in neighboring provinces, also attract tenants who are foreigners working in nearby industrial zones.
Previously, the trend of investment in apartments for rent focused on high-end apartments, now many mid-class projects depending on location also attract tenants.
Apartments with two or fewer bedrooms (2BRs) attract demand for rental and good rental investment because this type of apartment is suitable for the needs of young families as well as a lower investment than the type. Large area apartments.
Rents of high-end apartments targeted to foreigners generally have a monthly rent of 1,000 – 2,000 USD (with some services) for 2BRs apartments while in some sub-high-end projects, the average rental of 2-bedroom apartments will range from $ 400 – $ 900 / month, targeting more diverse tenants and lower rental budgets.
What is the cause of this growing trend?
In the past, renting was not the preferred option for most Vietnamese and was often seen as an option only for those who could not afford to buy a house than in big cities with high urbanization speed and fast economic development.
Due to high housing prices and high-interest costs, some people from neighboring provinces living and working in Hanoi as well as independent young people who cannot afford to buy houses will have to rent. These groups can choose projects that are convenient for living and working in accordance with their rental budget, where they cannot afford to buy houses because of the expensive price. This is also a solution many people choose while accumulating financial resources to buy a home. At the same time, foreign experts (in intermediate management positions, employees) working and living in Vietnam choose to rent apartments to fit their budget.
On the rental side, families sublease housing in good locations (with higher rents) and apartments to stay in order to enjoy the difference and live in a more modern environment. Thus, due to the demand for apartments, investors may sub-lease apartments. The market also appears more than the projects with good leasing capacity. These are projects with good quality management and services, fully convenient for residents and located in convenient locations, thus attracting tenants.
It should also be added that, the investor also pays more attention to the product stage and the structure of apartments, reasonable area to target buyers who are rental investors.
How do you evaluate the correlation between the investment in apartments for sale and the investment in apartments for rent now while the rental price of apartments is increasing faster than the selling price of apartments?
In general, investing in apartments has two forms, one is to invest in apartments for rent and the other is for buying and selling. For apartments, the investors for rent are often the longer-term investors because the source of income will be the monthly rental of apartments.
Investors who buy and sell often have shorter investment periods and proceed to resell apartments when obtaining expected profitability. Depending on the project, location, profitability of the two forms will be different. Rental investment usually has a stable monthly/recurring income based on a lease, the average return is usually at 5.5 – 6.5% / year.
Monthly rents in some projects with good rental demand, recently also tend to increase by 2-3% / year. While investment in resale will vary from time to time and project, profitability may change.
In the midst of such a vibrant real estate rental market, with the diversity of apartments of buildings, how can landlords find tenants and tenants find apartments that are right for them? Of course, they have to use a broker to quickly and easily find customers. We would like to introduce a reputable agent, Alphahousing, with a combined experience of up to 10 years of experience with a professional management team along with the dynamic, responsible staff. Alpha Housing has helped a lot of customers find a perfect home, both homeowners and guests are very satisfied with the company’s service. Alpha Housing always makes sure to try to find the most satisfactory apartment for customers, which supports customers and homeowners as much as possible.
