The rental market in Hanoi is experiencing a significant divide between residential and industrial properties. While the number of mini-apartments is increasing, high rents are leading to rising vacancies. In contrast, industrial real estate is seeing rent increases due to a resurgence in demand for logistics and advanced manufacturing.
On July 15, local media reports indicated that areas densely populated with mini-apartments, such as My Dinh, Phu Do, Ho Tung Mau, Pham Van Dong, Tran Thai Tong, Duong Quang Ham, and Cuong Dinh, are seeing an uptick in notices seeking tenants. A landlord operating a 20-unit mini-apartment building reported that 20-25% of the units in a recently completed building have been vacant for over three months. The monthly rent for rooms measuring 20-28 square meters, equipped with a bed, refrigerator, wardrobe, washing machine, and air conditioning, ranges from 4.2 million to 6.5 million dong (approximately $177 to $275). The increase in vacancies is attributed to both rising supply and the financial burden of high rents. The landlord noted that several new mini-apartment buildings have started leasing around the same time, making it difficult to lower rents due to loan interest burdens.
Another landlord managing properties near the Korean community in My Dinh stated that nearly half of the mini-apartments completed nearly a year ago remain unoccupied, with vacancy rates rising by an additional 15% in the second quarter. He explained, "While the supply of newly built mini-apartments has increased, tenants are cutting back on spending, and landlords are reluctant to lower prices, leading to higher vacancy rates."
Tenants Prioritize Affordability Over Location
Tenants are increasingly prioritizing actual costs over proximity to work. A technology company employee in the Cau Giay area, identified as C, reported struggling for nearly two weeks to find a suitable room near his workplace. Nearby mini-apartments typically charge monthly rents of 4.5 million to 8 million dong (approximately $191 to $340) for units sized 20-30 square meters. He currently shares a 55-square-meter apartment in the Tay Mo area, located slightly farther from the city center, with three friends for 9 million dong (about $383) per month. Including utilities and management fees, his share amounts to around 3 million dong (approximately $127) per month.
Price indicators also reflect the financial strain on tenants. According to the online real estate platform Batdongsan, the number of mini-apartment rental listings increased by over 3% last month compared to the previous month, yet rents rose by 3.4% compared to the same period last year. The consumer price index (CPI) for the second quarter rose by approximately 5.3% year-on-year, with the housing rental index increasing by 6%, contributing 0.85 percentage points to the CPI rise. Le Hoang Chau, president of the Ho Chi Minh City Real Estate Association, stated, "Rents are considered reasonable when they account for about 20% of income; exceeding 25% puts significant pressure on living expenses and savings."
In response to these challenges, the Hanoi government is working to establish rental price standards for housing. The Hanoi People's Committee has tasked relevant departments with creating rental price guidelines for housing investment projects, with completion expected by the third quarter of 2026. Currently, rental prices for social housing in Hanoi vary from 48,000 to 198,000 dong per square meter per month, depending on the building's height.
Industrial Rental Market on the Rise
Meanwhile, as residential mini-apartments grapple with vacancies, the industrial real estate sector is witnessing price increases driven by recovering demand. According to CBRE Vietnam, the industrial real estate market in northern Vietnam saw an increase in new supply and recovering rental demand in the first half of this year. The rental price for completed warehouses in the northern region rose by 5.4% year-on-year to approximately $4.9 per square meter per month, while completed factory rents increased by 3% to about $5.1 per square meter per month. The expansion of investments by major companies such as Samsung, LG, and Foxconn in the electronics and advanced technology sectors has also contributed to the demand for industrial land.
The southern industrial real estate market is also showing signs of recovery. In the southern region, including Ho Chi Minh City, Binh Duong, Dong Nai, Long An, and Ba Ria-Vung Tau, the absorption area for industrial land in the first half of the year reached 124 hectares, a 125% increase compared to the same period last year. Major tenants include those in the electrical, electronics, and logistics sectors.
Experts believe the mini-apartment market has moved beyond a phase where units were quickly filled upon completion. Pham Duc Toan, CEO of EZ Property, explained, "The simultaneous operation of new buildings has led to a surge in supply, and the financial burden on tenants is preventing demand from absorbing it all." Bo Hong Tang, deputy general director of DKRA Consulting, added, "Buildings with good locations, professional management, and reasonable rents are advantageous, but average-quality buildings may need to consider lowering rents or offering service benefits."
Amid these developments, online users are also paying attention to the burden of rental prices. One commenter noted, "High prices make customers more cautious, and increased competition signals market adjustments." Another user remarked, "For 4 million dong, it’s better to gather people and rent an entire apartment; honestly, it’s hard to find tenants for a room costing 6.5 million dong that’s less than 30 square meters."
* This article has been translated by AI.
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