Young people are increasingly interested in owning real estate.

Young Generation Confident in Home Buying Ability

According to a 2023 Bank of America survey, many Gen Zers not only aspire to become homeowners by age 30, they are also very determined to achieve it.

In this survey, 59% of Gen Z respondents said they want to own their own home within the next 5 years. In addition, 33% shared that they want to buy a home, but it may take at least 6 years to realize that dream. Notably, up to 52% of young people have focused on saving money to own a home from a very young age.

Similarly in Vietnam, the younger generation is also interested in the real estate market and shows a desire to own a home. A recent survey by Batdongsan.com.vn shows that compared to 2021, the level of searching for real estate news on real estate sites has increased sharply. Of which, Gen Z increased by 18.7%; Gen Y increased by 42.1%.

In terms of financial choices, young customers choose to take out home loans more than the previous generation. In terms of living place, they prioritize flexibility in accommodation for better experiences and opportunities. In terms of living space, green space and technology are the two most chosen trends.

Young people are increasingly interested in owning real estate. — Young people are increasingly interested in the real estate market.

However, in a survey on real estate prices, 46% of respondents said that real estate prices are quite high; 26% said that real estate prices are very high; 23% said that real estate prices are neither high nor low; only 5% said that real estate prices are quite low.

Mr. Le Bao Long - Director of Batdongsan.com.vn said: "High real estate prices make home ownership difficult, but young people are increasingly interested in real estate and owning real estate. They are confident in their ability to buy a house, despite difficulties due to market knowledge. However, this group of customers will create strong changes in the real estate development trend of investors in the coming time".

Regarding the ability of young people to buy a house, Mr. Troy Griffiths - Deputy Managing Director of Savills Vietnam said that Gen Z can own a house if they have a good job and work hard. Vietnam is still showing positive prospects for the labor market and this continues to promote economic growth, making this country a place where Gen Z has more opportunities than other competitive markets around the world.

Troy Griffiths said that a typical savings period of five to 10 years is enough for them to save the initial capital needed to buy an affordable apartment. By working hard, planning smart savings and investing in new areas that will benefit from improved infrastructure, Generation Z can secure a brighter future.

“Currently, while primary prices remain stable, the scarcity of housing has pushed up secondary market prices. However, as developers are able to develop new supply, prices will become more affordable,” said Troy Griffiths.

Rising rents also affect home ownership trends

High rents are also reflected in the survey by Batdongsan.com.vn when 69% of tenants expect a reduction in rents. This rate in Ho Chi Minh City is about 63%, in other areas it is 36%. In addition, 70% of landlords are willing to reduce rents but the reduction is not significant, because 53% of them said they would only accept a reduction of less than 10%; 16% of landlords have a higher reduction, ranging from 11-20% and 29% of landlords said they would not reduce rents.

Mr. Le Bao Long emphasized that the rental price index in Hanoi and Ho Chi Minh City has continuously increased over the past two years, from 100 points in Hanoi and Ho Chi Minh City in the first quarter of 2021 to 131 points in the fourth quarter of 2023 in Ho Chi Minh City, and 146 points in Hanoi.

Therefore, tenants also proactively seek out properties with smaller areas or far from the center when the rental price is high. Of these, 67% of tenants said they would rent a smaller house; 27% would rent further away; 20% chose to live with more people to save costs; 13% said they would rent a place with fewer amenities; 7% said they would rent a house with less furniture.

In particular, among those who are renting houses, there is a group of young customers who have enough financial capacity but choose to rent a house to optimize the use of capital. Accordingly, this group believes that renting a house will be more effective than buying because it has a higher profit rate.

Instead of buying a house, they use that money to invest with high interest rates, thereby paying for the rent. Thanks to that point of view, many people can live in high-end areas and change their residence as they like, without having to pay depreciation costs as well as other fees that come with owning a house.

However, house rental prices are increasing day by day, other investment channels have not brought attractive profit rates as before. Therefore, many people have started to think about owning a house, especially in the current period, when investors offer many attractive incentives such as principal grace period, 24-month interest-free period, support of 70% of contract value...

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