Single-room housing grows increasingly expensive in Hanoi

The ride-hailing driver has been renting his current 18-square-meter room in Nam Tu Liem District since 2023 for VND2.5 million a month.

Last month the landlord renovated his room to improve fire safety and added a bed, a wardrobe and an air conditioner before announcing the rent hike.

"The rental rates in this area have gone up, and with the added amenities, the price cannot remain the same as before," they said.

Khanh decided to move to a cheaper place, but after nearly three weeks of scouring inner-city districts such as Nam Tu Liem, Cau Giay and Thanh Xuan, he was unable to find anything for VND2-2.5 million.

Anything less than VND2 million only fetched him a bed in a mini dorm or a sleeping pod, sometimes as small as 8-10 square meters and posing a fire hazard.

Exhausted, Khanh resorted to sharing his room with a stranger to split the cost.

A boarding house offering 20 rooms for rent in an alley in Hanoi's Nam Tu Liem District. Photo by VnExpress/Ngoc Diem

Thu Hang and her husband in Cau Giay were surprised when told their rent would jump by 20% to VND9 million after their lease expired this month.

The 25-square-meter room in a mini apartment building on Cau Giay District’s Tran Thai Tong Street only cost VND7.5 million when they moved in in 2023.

Their landlord also upgraded the furniture and cited this as the reason for the hike.

"If you do not agree with this, then you can move out soon," they said.

And that was what many tenants in the building, including Hang and her husband, did.

After several fruitless days of searching for mini apartments in the central districts, the couple shifted their focus to rooms for rent on the outskirts, choosing to endure a longer commute to work for a more comfortable living space.

Since the beginning of this year many landlords in Hanoi, especially in inner-city areas, have raised rents by 10-15%.

The majority of them cited rising real estate prices and room renovations as the reasons.

Many rooms in mini apartment buildings now cost VND10-12 million a month, the same as for an apartment on the outskirts.

The rent increases far outpace the growth in average urban residents' incomes, which only grew by 5.3% last year to VND6.3 million a month, according to the General Statistics Office.

A mini apartment building with dozens of rooms in Hanoi's Thanh Xuan District. Photo by VnExpress/Tung Dinh

Dinh Minh Tuan, a director at real estate trading platform Batdongsan, said housing rentals are rising in large urban areas due to high demand from blue-collar workers.

According to a 2023 survey for the Provincial Governance and Public Administration Performance Index, HCMC and Hanoi are the most desired destinations for migration within Vietnam.

Some 22% of respondents said they wanted to move to these cities to find better job opportunities.

Tuan said more workers have been migrating to large cities in recent years, driving up rental demand there.

Data from Batdongsan indicates that single-room units are the only rental segment to grow significantly this year.

Compared to the end of last year the segment has received 12-15% more interest from tenants.

Tuan said the recent deadly fires at boarding houses and mini apartments have forced landlords to invest in fire safety, and so they hike rents to make up these costs.

According to experts, an effective solution to bring down rents in major cities is to boost social housing as it provides affordable and safe accommodations for migrant workers, young couples, students, and fresh graduates.

These people are the primary renters of rooms in boarding houses and mini apartments.

To achieve that experts suggest offering favorable interest rates, tax incentives and easier access to resources to encourage more developers to invest in social housing.