High apartment prices, income of 30 million VND/month, how to buy a house?

Survey shows that even the population group in large urban areas with an average income of 13 - 18 million VND/month also has difficulty buying a house.

In a recent report, the Vietnam Association of Realtors (VARS) cited data from the 2023 population living standards survey by the General Statistics Office, showing that the 20% population in some localities such as Hanoi, Ho Chi Minh City or Da Nang has an average income of 13 - 18 million VND/month. This is the group that can afford to buy a house in a large urban area without support from the government. However, in reality, even this group has difficulty buying a house.

VARS calculated that a household with 2 workers in the high-income group has a total income of about 30 million VND/month, equivalent to 360 million VND/year. According to financial rules, housing costs should not exceed 1/3 of income, or about 80 million VND/year. Meanwhile, apartment prices in Hanoi and Ho Chi Minh City currently fluctuate between 40 - 70 million VND/m², meaning a 60 m² apartment costs 2.5 - 3.5 billion VND.

If buying an apartment worth 3.5 billion VND, the buyer must borrow 70% (about 2.45 billion VND) from the bank at an interest rate of 8%/year for 20 years, paying monthly installments of about 25 - 27 million VND, equivalent to more than 300 million VND/year. Meanwhile, the ability to pay is only about 80 million VND/year. This shows that owning a house in big cities is a big challenge, even for high-income groups.

Mr. Doan Quoc Duyet, General Director of Tin Thanh Real Estate Company, said that housing prices in large cities are currently too high compared to workers' incomes. This situation is due to the increase in immigration and public investment focusing only on a few areas, pushing real estate prices up continuously. While the demand for mid-range and affordable housing is huge, supply is scarce, while the high-end segment still dominates the market. Even in 2024, there will still be projects priced at over 100 million VND/m².

With a price of 50 - 70 million VND/m2 for a mid-range apartment, ordinary workers have to work for more than 20 years to save enough money. Most home buyers have to borrow from the bank 50% - 70% of the house value, facing great pressure on interest rates and debt repayment. Therefore, many people do not dare to buy a house due to fear of debt burden.

Instead, they choose to rent a house and gradually save up. Others, after a long time working in the city but still not being able to afford to buy a house, have to accept "leaving the city to return to the countryside" to find other opportunities. Many young families of the 9X generation and Gen Z also choose to rent a house, focus on developing their business, investing in finance to increase their income, and then consider buying a house.

In reality, buying a house is always a challenge for ordinary workers. Real estate prices are determined by the market, so middle-income earners need to develop additional sources of income and consider borrowing to buy when conditions are suitable. If they cannot afford to buy a house in the inner city, people can start with suburban real estate and gradually upgrade. It is necessary to take advantage of the opportunity to buy a house when young, because the price of houses will increase later.

Mr. Duyet also advised home buyers to carefully calculate their financial capacity and not borrow more than 50% of their monthly income to avoid falling into debt pressure.

Source: https://nld.com.vn/gia-ban-can-ho-cao-nhieu-nguoi-chon-giai-phap-thue-196241216202236843.htm