Research data from the Vietnam Association of Realtors (VARS) shows that the recommended minimum income to buy an average-priced house in Hanoi is about 2.3 to 10 times higher than the average household income in Hanoi.
Specifically, according to data from the General Statistics Office, the average monthly income of workers in Hanoi in the third quarter of 2024 reached 10.7 million VND/month. Assuming a household of 4 people, of which 2 are of working age, the total household income will be about 21.4 million VND/month.
With the average primary apartment price in 2024 reaching 70 million VND/m2, newly opened projects are priced from 60 million VND/m2, to be able to buy an apartment in Hanoi, buyers need a minimum income ranging from 45 million to 210 million VND/month, depending on the area.
The significant gap between actual median income and house prices makes home ownership in Hanoi today not only challenging but also impossible for the vast majority of households with average or even good incomes. In central districts such as Hoan Kiem, Ba Dinh, Dong Da, Hai Ba Trung or Tay Ho, the gap between the minimum annual salary needed to pay a mortgage and the median household income reaches 10 figures.
Meanwhile, suburban areas such as Ha Dong, Bac Tu Liem or Long Bien have more accessible prices, but are only suitable for individuals and households with incomes of 40 - 60 million/month.
If calculated based on the average house price in each district and assuming that the buyer can borrow 70% of the house value from the bank with an average interest rate of 8%/year for 20 years, the total monthly installment should not exceed 40% of income, then the recommended minimum income to buy an average-priced house in Ha Dong, Long Bien, Nam Tu Liem, Bac Tu Liem, Gia Lam is about 2 to 3 times higher than the average household income of Hanoi workers.
In Hoan Kiem, Ba Dinh, Hai Ba Trung, Dong Da or Tay Ho districts, the minimum income required is above 1 billion VND/year, equivalent to a difference of about 3.7 to 8 times. In Cau Giay and Thanh Xuan districts, the difference is 3 to 3.5 times.
This means that buying a house in Ha Dong, Long Bien, Nam Tu Liem, Bac Tu Liem, Gia Lam districts is more feasible for households with typical incomes, provided they are willing to “bear” the cost burden, spending more than 40% of their income on monthly installments.
Dr. Nguyen Van Dinh - Chairman of VARS said that over the past years, for many individuals and households with typical average income, buying a house is not only to meet the need for housing but can also be a form of investment. Because history shows that housing prices in large cities in Vietnam in general, Hanoi in particular, in the past decade have increased on average faster than the growth rate of income, higher than other investment channels and loan interest rates.
However, the affordability of housing for middle-income earners is becoming increasingly difficult as housing prices continue to rise, with newly launched projects all having high prices, from VND60 million/m2 and up. Depending on investment taste and lifestyle, some people will still choose to reduce living expenses, accept risks to buy a house early, accept bank loans and endure financial pressure.
Others will choose to wait or rent a house to be more flexible in finance as well as satisfy the difference in lifestyle. Because the current housing price level in Hanoi is "anchored" high, the price increase rate is difficult to maintain as in the previous period.
In particular, economic downturns can cause homebuyers’ incomes to fall, reducing their ability to pay or increasing the pressure on those who have borrowed money to repay. Bank interest rates are not fixed and in some periods, interest rate adjustments make home loans more expensive, which can make it impossible for them to meet the repayments.
With the current good interest rates, households with typical incomes or individuals with equivalent incomes, with at least 30% of the apartment value in cash, can still choose to take out a home loan. However, home buyers need to accept moving to lower-priced areas such as districts far from the center or satellite cities around Hanoi.
“With the attention and focus on investing in and developing a synchronous transportation network, travel between regions will become increasingly more convenient, with shorter travel times. This will positively contribute to helping people be more willing to choose housing in areas further from the center.
However, to attract home buyers, investors need to offer more reasonable prices, suitable to the needs and affordability of people, creating home ownership opportunities for many people," the Chairman of VARS expected.
Source: https://doanhnghiepvn.vn/kinh-te/bat-dong-san/mua-can-ho-ha-noi-can-thu-nhap-tu-45-210-trieu-dong-thang/20250209030646481
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