escalating apartment rental costs observed in Ha Noi due to increasing tenant demand
Hanoi's Booming Rental Market: Bustling with Young Professionals
Hanoi, here we see a thriving rental market, steered by the lifestyle shifts of young, professional tenants.
Recently, a surge in demand for rental properties has become evident, as the prices of apartments continue to skyrocket. batdongsan.com.vn reported that, in Q1 2025, rental rates for furnished two-bedroom apartments in key districts like Hoàng Mai and Ba Đình have risen significantly compared to the end of 2024. For instance, rentals for apartments in HH Linh Đàm and Discovery Central now stand at VNĐ8.5-10 million and VNĐ18-19 million per month, respectively.
The ever-increasing prices of apartments are compelling landlords to raise rental rates, to maintain their cash flow and investment returns. Other cost pressures, such as escalating construction materials, maintenance fees, and management charges, contribute to higher rents, particularly in luxury, amenity-rich complexes.
Besides the overt economic factors, there are other driving forces behind this rental boom. According to Phạm Thị Miên, deputy director of the Real Estate Research Institute, the evolving preferences of young professionals are shaping the rental housing market. Young professionals are seeking flexibility and mobility, opting for rentals over property ownership.
This trend extends beyond apartments, with an increasing number of individual houses being rented out for residential purposes. Renovated rental houses, equipped with modern amenities and smart layouts, cater specifically to the needs of young workers and students. These accommodations offer a minimalist, clean aesthetic, appealing to the modern, urban lifestyle.
However, as rental costs escalate, it becomes increasingly difficult for low- and middle-income tenants to afford housing in major cities. Many tenants are being forced to compromise, moving to the outskirts or making do with lower-quality accommodations. To combat this issue, the Real Estate Brokers Association has urged the government to promote the development of affordable housing through tax incentives, low-interest loans, and reduced land costs.
Meanwhile, the expansion and development of industrial parks in Hanoi, fueled by strong Foreign Direct Investment (FDI), are driving demand for serviced apartments. The city attracted $2.2 billion in FDI from 293 newly registered projects in 2024, a significant increase year-over-year. The serviced apartment market, primarily catering to foreign professionals, engineers, and technicians working in industrial parks, is expected to expand further, as nine out of the city's ten operational parks are at full capacity.
Moving forward, 17 new projects are set to introduce an additional 4,077 units, with 2,889 scheduled for completion in 2025. The majority of the upcoming inventory will be situated in secondary areas, with the rest in the western region. Branded operators will dominate this segment, accounting for 87% of upcoming supply.
While our analysis focuses mainly on rental trends in the main apartment market, it is worth noting that new apartment launches have dropped significantly in Q1 2025, with reports indicating a 39%-52% quarterly decline in supply[2][5]. This constrained supply contributes to the upward price pressures, with primary apartment prices maintaining an upward trajectory[3]. In the serviced apartment segment, Grade A rents reached $42/sqm/month in Q1 2025, reflecting a 8% increase quarter-over-quarter[1].
The evolving lifestyle preferences of young professionals are also promoting development of the rental housing market. - VNA/VNS Photo
In conclusion, Hanoi's rental market presents an interesting landscape, with supply constraints driving up rental rates in the mass market, while demand for serviced apartments is being fueled by foreign investors. Ultimately, young professionals appear to be both drivers and victims of this trend, as they contend with limited affordable housing options while contributing to the demand for quality rentals. The growth of co-living spaces and adaptations to urban lifestyle preferences can be seen as responses to these shifting trends.
Sources: batdongsan.com.vn, VNS, Savills Hà Nội, Colliers International
- The government is urged to promote the development of affordable housing to address the challenge of high rental costs.
- The evolving preference of young professionals for flexibility and mobility is shaping the rental housing market in Hanoi.
- Real estate investors are interested in the growth potential of co-living spaces, as a response to shifting lifestyle trends.
- Renting individual houses equipped with modern amenities and smart layouts is becoming more common, catering to the needs of young workers and students.
- Banks and financial institutions have the opportunity to invest in real-estate projects that aim to provide affordable housing.
- The vibrant rental market in Hanoi is largely driven by young professionals settling in the city for its dynamic lifestyle.
- Artificial Intelligence and smart home technologies may play an increasingly significant role in managing and optimizing rental properties to meet the demand of modern tenants.
