Expats struggle to find affordable housing amid soaring rentals

By Dang Khoa   November 20, 2022 | 03:29 pm PT
Expats struggle to find affordable housing amid soaring rentals
Apartment projects in HCMC's Thu Duc City. Photo by VnExpress/Quynh Tran
With apartment rentals skyrocketing and eating up a large chunk of their income, many foreigners in Hanoi and HCMC are looking to relocate to more affordable accommodations.

Hanoi English teacher Allie Crump moved out of her old apartment in May after her landlord repeatedly hiked the rent since the Covid restrictions ended late last year.

During the pandemic she and a roommate had paid VND10 million ($402.94) for an 84 sq.m two-bedroom apartment in Tay Ho District. But in February her landlord increased it to VND12 million and then to VND16 million shortly afterward.

Crump, who has been living in Vietnam for nearly eight years, says: "I was so frustrated that I asked one of my Vietnamese bosses to negotiate with the owner who doesn’t speak English. But we couldn’t reach an agreement."

When the owner said the rent would be raised to VND17 million in May, the two decide it was time for them to pack up and leave.

With service apartment rentals in both Hanoi and HCMC being astronomical, Crump is one of many expats who have relocated or are on the lookout for an affordable place.

Hanoi apartment rents increased by 8-16% in the third quarter, according to realty website Batdongsan.

It said demand increased by 13% from the previous quarter, and rents rose by 8-10% in and near the downtown area such as Hoan Kiem and Hai Ba Trung districts while a little further away, in districts like Cau Giay and Nam Tu Liem, they were up 14-16%.

A real estate agent said rents in and near the downtown have increased by VND1-2 million (US$42.5-85), and a two-bedroom apartment in Sky City Lang Ha now costs VND16-18 million a month.

In HCMC, rents for serviced apartments urban districts climbed by 6-8% year-on-year in the third quarter. As of late September 75-80% of serviced apartments in Districts 1, 3, Phu Nhuan, and Binh Thanh were occupied, a VnExpress survey found. The rate was 90% in some places.

Analysts expect rents to keep rising in the remaining months of this year as demand outweighs supply, the economy is picking up steam post-Covid and more Vietnamese are opting to rent rather than buy due to the increasing costs of houses and apartments.

Another factor is the influx of foreigners coming to Vietnam after Covid.

Savills Vietnam reports a significant year-on-year increase in the demand for long-term serviced apartment rentals, particularly among Japanese, South Korean and Taiwanese professionals.

Cao Thi Thanh Huong, research manager at Savills HCMC, said the influx of expatriates has helped the serviced apartments market gradually recover to pre-Covid levels.

Finding an affordable apartment has become a pressing need for many expats as rentals surge and leave a hole in their wallets.

The number of expats living and working in Vietnam was 117,800 in 2019, ten times higher than 2005, and 1.4 times higher than 2015.

Apartment buildings in Hoang Mai District, Hanoi. Photo by VnExpress/Ngoc Thanh

Apartment buildings in Hoang Mai District, Hanoi. Photo by VnExpress/Ngoc Thanh

In the past few months Hanoi and HCMC expat online community groups have been deluged with posts seeking recommendations for cheap apartments. Tips on finding apartments that allow pets, English-speaking real estate agents, affordable movers, and others have also been on the agenda.

Online groups seem to be the go-to place for expats to find property listings since the popular real estate websites are not available in English.

Crump says: "[Besides] I don’t know which one is reliable. So I had to hire an English-speaking agent to help me."

Crump and her roommate joined various apartments for rent Facebook groups to search for affordable accommodation. She was suprised to find that all the listed properties were taken almost immediately.

"When I contacted the people making the posts, many told me these rooms are not real and do not exist."

Trung, a realtor in HCMC, explains that it is usually a ruse.

Many people post fake ads with beautiful pictures of houses for rent on Facebook. When a person contacts them to inquire about the place, the poster determines whether it is an agent or someone actually requiring a place for rent and then shows them another house they are struggling to rent out.

When Crump and her roommate finally had enough of looking for cheap flats on their own, they contacted an agent who spoke English to assist them.

After a long and arduous search, they managed to find on Facebook a three-bedroom apartment in Tay Ho District that was within their price range, spacious, close to work, and not hard to find.

"To be honest, I didn’t like it at first when I saw at the advertised photos. But I am glad it looks better in real life."

She has been living here since May, paying VND15 million for a large house.

Martha, a Singaporean living in Hanoi who asked to be identified by just one name, says she is "blessed" to be currently paying VND17 million for a 160-square-meter apartment in Cau Giay District with three bedrooms and bathrooms.

Her family has been living there since 2019. Her landlady lowered rent during the pandemic but only increased the rent by VND1 million after it ended.

"I am very blessed to have such a nice and generous landlord who did not increase the rent too much and maybe even charges me below the market rate."

She says she is aware that the market rate for her apartment starts at VND20 million.

Jongrak Choi from South Korea also considers himself lucky since his rent has remained unchanged since Covid.

He is happy with his current rent of VND9 million for a one-bedroom apartment in HCMC’s District 4 since the market rate is VND10-12 million.

Besides he does not want the hassle of finding a reliable real estate agent and decent landlord all over again.

"Many landlords tend to overcharge foreigners. I know many places are overcharging expats."

Crump concurs saying: "My previous landlord thinks foreigners earn more and so we should pay more."

Martha says, "having a good, honest and kind landlord" is also an important factor for her if she decides to move in future.

Crump, who is clearly happy with her new house, says: "The new landlady, who also lives in the same building, is also sweet and lovely."

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