Average house price in Vietnam is nearly 24 times higher than income

(VARS) assessed that the apartment price index in Hanoi in 2023 increased by about 38% compared to 2019.

VARS data also shows that over the past few years, apartment prices have grown by an average of double digits each year. Last year alone, the Hanoi apartment price index increased by 16% compared to the beginning of the year. This index in Ho Chi Minh City also entered a growth cycle again from the third quarter of 2023 due to the gradual decline in prices of high-end and luxury projects in the secondary market.

Primary apartment prices across the country are also high because most new projects cost over 40 million VND per square meter.

The average house price in Vietnam is 24 times the average annual household income. Illustrative photo.

In Hanoi, prices of both existing and new apartments have increased sharply. Even in areas dozens of kilometers away from the city center, apartments are being advertised for sale at 60-70 million VND/ ^m2 .

According to Ms. Do Thu Hang, Senior Director of Research and Consulting Department, Savills Hanoi, the reason for the continuous sharp increase in apartment prices in Hanoi, Ms. Hang pointed out that the reason is due to the high construction costs, the development of infrastructure, which is pushing up real estate prices. In addition, legal problems are causing the supply of apartments to continue to be stagnant.

Scarce new supply and high selling prices are also challenges. In 2023, the supply of new apartments was recorded at the lowest level in 10 years with more than 10,000 units.

According to experts, to improve the selling price of apartments, the first factor is to improve the market supply. In which, the development of social housing with low prices will help the average selling price of apartments decrease sharply.

Faced with the unreasonable situation in product structure, since the beginning of the year, the Prime Minister has requested the Ministry of Construction to guide enterprises to restructure segments, reduce product prices; have appropriate, timely and effective solutions to restructure segments for people with real needs, social housing, housing for workers and low-income people.

Workers' housing demand increases sharply

Owning a home is almost impossible for low-income workers without support. The question is how can poor and disadvantaged workers access social housing?

Mr. Duong Van Quy - Binh Tan District, Ho Chi Minh City said: "With our current income, we can accept long-term rental. If the project has a bigger room, we can accept long-term rental, just like when we rent a room, we can rent for about 3-5 million VND per month."

"With my income, I can buy a house for less than 800 million VND, pay 30-40% in advance, and hope the State will support a loan of 300-400 million VND. After that, I will pay 5-6 million VND in monthly installments from my savings," said Ms. Nguyen Ngoc Han - Workers' accommodation area, Vinh Loc Industrial Park, Ho Chi Minh City.

Statistics from enterprises in Vinh Loc Industrial Park, Ho Chi Minh City, show that the average income of skilled workers is currently from 12 to 13 million VND or more, while for newly hired unskilled workers, it is guaranteed to be at least 6 million VND/month.

Mr. Diep Nam Hai - General Director of Cholimex Food, Vinh Loc Industrial Park, Ho Chi Minh City said: "Currently, Cholimex Food has rented 100 houses in the workers' accommodation area, providing accommodation for 200 workers. That is only 5% of the company's total workforce, most of the rest are in boarding houses."

According to a survey on social housing by the Private Economic Committee, up to 57% of workers have a need to rent or buy social housing or commercial housing, and nearly half of the workers in this group need social housing.

According to VTV

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