Living on the outskirts, commuting long distances save money for many

The 29-year-old communications employee lives seven kilometers from the Bien Hoa City bus station in the southern province of Dong Nai and his office is in HCMC’s District 1. He rides his motorcycle to the bus station, parks it there and takes a bus to HCMC, arriving at 8 a.m., just in time for breakfast before his 8:30 a.m. start.

He has maintained this routine for the past year.

"It’s exhausting and time-consuming, but I save a lot compared to renting in the city," he says.

He looked up rents in the city’s Districts 1, 3 and 5, which are not far from his workplace, before deciding to rent in Bien Hoa. However, a "decent" room in HCMC’s central districts that meets his standards—including a private bathroom and a small kitchen within a 15-20 square meter space—typically costs between VND2.5-4 million (US$98-$157).

Given his salary of VND10-12 million and financial responsibility towards a retired mother and a brother in university, he needs to manage his budget carefully.

"The bus isn’t a bad option," he says. "It’s clean, cool and economical."

Bien Hoa bus station, from where Quan takes a bus to work every day. Photo courtesy of Quan

During his bus ride, he naps, reads, responds to messages, or works.

The return trip after work is often a nightmare due to severe congestion on the highway connecting Bien Hoa and HCMC.

"During holidays or heavy rain, the commute can increase by an hour," he says. "But if I were to ride my motorcycle, I’d get home even later and utterly exhausted."

He admits to missing many after-work social events with colleagues because he needs to catch the last bus home at 9:15 p.m. After many such refusals, he has gradually lost connection with them.

With rising rents in HCMC, many people do the same thing as Quan.

A report by real estate consultancy JLL says rents in the city increased by an average of 5.9% year-on-year in the first three months of this year.

Meanwhile, a 2023 living standard survey by the General Statistics Office found that the average urban income increased by only 5.3% from 2022 to less than VND6.3 million.

A VnExpress survey that asked respondents "Where do you choose to rent when rents are increasing?" found 41% opting for cheaper suburban homes.

Property Guru’s second quarter report said that, in the context of rising rents, leasing houses far from their place of study or work was one of the five strategies adopted by people to reduce costs alongside renting smaller places, sharing housing, etc.

The trend of moving to far-flung places grew by 25% compared to a year ago.

Bao Hoang’s most recent house move saw him rent a small single-story place in HCMC’s District 12. So he has to spend 45 minutes commuting nearly 20 km to his workplace in District 3.

Many of the 28-year-old’s friends advised him against the decision due to the distance. But he has two reasons for living far from the city center.

Firstly, he has four cats and needs space for them to roam about without disturbing the neighbors, which is difficult in central areas. Closer to the city center, apartments cost VND7-8 million a month, while his income is just over VND20 million.

Secondly, the cost of living, including groceries and eating out is also lower in the outer city, he points out. "I think I can save a considerable amount of money."

Real estate in Thu Thiem peninsula, Thu Duc City, July 2023. Photo by VnExpress/Quynh Tran

Ngo Thanh Huan, director of personal finance at FIDT, a company that offers investment consultancy and wealth management services, believes this trend reflects young people’s choice to minimize expenses.

"But all choices involve trade-offs," he says. "Renting in cheaper suburban areas costs effort and travel time."

Some of his clients are willing to spend more to rent near their workplace to gain an additional 30-45 minutes for sleeping or going to the gym or pool in the morning. But he says many overspend their budget as a result.

He says people should divide their income into three parts: essential needs, entertainment needs and savings. Essential expenses should only account for 50-70% of one’s income, and the rent they pay should only account for 20% of their income, he says.

He cites the example of a client with an income of VND20 million a month but only savings of VND30 million despite working for two years. They rent an apartment that costs VND8 million a month.

He points out that time is "also an extremely valuable and limited asset."

Hoang acknowledges this. Often he finishes work at 6 p.m. but has an appointment at 8:30 p.m., and so chooses to rest in a café with beds.

He notices that some of his colleagues who rent within a five-kilometer radius from work usually have an extra 40-45 minutes to relax at home. While they cook, clean and care for their children at home, Hoang is stuck in traffic.

He is planning for yet another move.

Huan, the finance man, notes that apartment rents are usually higher than townhouses’ because they have a gym and pool. So he suggests that people should lease townhouses and buy gym memberships outside when needed.

In his estimation, people earning less than VND20 million, especially if they have a dependent, should save 10-20% while those earning VND20-40 million should save 20-30%.

Quan has savings of VND100 million. Now he spends time with his family and takes care of himself on weekends without worrying too much about finances. "I feel a bit short on time, but it’s worth it."