Hanoi rental market lifts real estate gloom
Families are cutting costs by renting out large homes in areas where business rentals can bring in much needed cash.
Houses for rent on Yen Phu Street in Hanoi
Nguyen Phuong Thao from a law firm in Hanoi said her family had decided to lease their 160-metre apartment at The Manor housing estate in Tu Liem District’s My Dinh Commune at USD1,400 per month.They hired a three-storey house at Dao Tan Street for just VND8 million per month, bringing extra income of nearly VND20 million per month.
Le Minh Hung who works at the Ministry of Justice decided to deposit VND1 billion, instead of using it for buying a house.
“If you have VND1 billion, you’d end up only being able to afford a house in the suburbs. However, with this amount of money you can get interest of VND10 million per month and which is enough to rent a house in the city centre and of course there’s no mortgage,” he added.
Many families in My Dinh and West Lake areas lease their houses to foreigners, while they rent a place for cheaper. “The real estate market has been facing difficulties for a long time and estate agents mostly survive through the rental sector. In the area surrounding West Lake, the rents can reach up to USD1,500-3,500 per month, therefore, many people decided to lease their big houses to foreigners and then hire a smaller and cheaper alternative,” said director of a real estate company.
House leasing market thrives
However, there can be risks when renting out a home.
“There are problems with renting, as the market hasn’t really matured yet, sometimes tenants find themselves evicted as the owner of the property wants to sell the house when the prices rise,” said Pham Sy Liem, Vice Chairman of the Vietnam Construction Association said.
According to Mr. Liem, it would improve the market if houses which are currently lying empty and awaiting sale were rented to low-incomes earners, particularly people working in industrial estates.
Nguyen Manh Ha, the Ministry of Construction's Housing and Real Estate Market Department said rental properties were an obviously solution for people who couldn’t afford to buy.
The government would consider preferential value added tax and corporation income tax rates and cheaper interest rates for developers considering these kinds of projects.
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