The assessment was made by the Vietnam Association of Realtors (VARS) when comparing Hanoians’ income with apartment prices. VARS stated that with current housing prices, many people do not earn enough money to buy a house.
Hanoi apartment prices have nearly doubled in recent years, while people's incomes have not increased significantly - Photo: NAM TRAN
Many households cannot buy a house.
In its recently released market newsletter, VARS said that housing prices have been high and increasing "dizzily" in recent times, while people's incomes have not improved correspondingly, leading to a continuous decline in housing affordability in Hanoi.
According to VARS, middle-income earners in Hanoi may have to put aside their desire to own a home or seek opportunities in areas with lower housing costs.
This is because many people do not earn enough money to buy a home or cannot "keep up" with the monthly mortgage payments when taking out a home loan.
Especially in the context of the economy facing many challenges and the risk of trade war, many people are worried about the ability to increase income.
VARS research data shows that the minimum income to be able to buy an average-priced house in Hanoi (affordable to pay for the house, home loans) is about 2 - 10 times higher than the actual average income of Hanoi households.
Data from the General Statistics Office shows that the average monthly income of workers in Hanoi in the third quarter of 2024 reached 10.7 million VND/month.
VARS assumes that a household of 4 people, including 2 people of working age, will have a total household income of about 21.4 million VND/month.
With the average primary apartment price in 2024 being around 70 million VND/m2, newly opened projects all costing from 60 million VND/m2 or more, to be able to buy an apartment in Hanoi, home buyers in Hanoi need to have an income ranging from 45 - 210 million VND/month, depending on the housing price in each area.
The significant gap between actual average income and house prices makes home ownership in Hanoi today a challenge for the majority of middle-income and high-income households, many of whom cannot afford to buy a house.
Specifically, in suburban districts such as Ha Dong, Bac Tu Liem, Long Bien, although current house prices are more accessible, they are only suitable for individuals and households with incomes from 40 - 60 million/month.
Want to buy a house have to go to the suburbs
VARS calculated with the average house price in each district of Hanoi and assumed that buyers can borrow 70% of the house value from the bank with an average interest rate of 8%/year for 20 years.
And with the financial principle that the total monthly installment should not exceed 40% of income, 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 - 3 times higher than the actual income of the average household.
The difference in central districts of Hoan Kiem, Ba Dinh, Hai Ba Trung, Dong Da or Tay Ho is from 3.7 to 8 times, in Cau Giay and Thanh Xuan districts it is from 3 to 3.5 times.
According to VARS, buying a house in Ha Dong, Long Bien, Nam Tu Liem, Bac Tu Liem, and Gia Lam districts is more feasible for middle-income households in Hanoi.
However, to buy a house, middle-income and high-income households have to bear the burden of spending more than 40% of their income on monthly home payments.
VARS also believes that housing affordability for middle-income earners is becoming increasingly difficult as housing prices continue to rise, with newly opened apartment projects all priced at VND60 million/m2 or more.
But with the current high housing prices in Hanoi, the price increase rate is unlikely to be maintained as in the previous period.
The reality is that bank interest rates are not fixed, and in some periods, interest rate adjustments make home loans more expensive, which can make it impossible for many home buyers to meet their installment payments.
Buyers need to accept moving to lower-priced areas such as districts far from the center or satellite cities around Hanoi.
Source: https://tuoitre.vn/muon-mua-chung-cu-ha-noi-phai-co-thu-nhap-tu-45-210-trieu-dong-thang-20250208171710066.htm
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