Young people save up for nearly 26 years to have enough money to buy a house, is it too long?

It is difficult for young people to buy a house at any time. Accordingly, a 7X generation needs to work and save for 31.3 years to have enough money to buy a house, while an 8X generation needs 22.7 years, and a 9X generation needs 25.8 years.

Real estate prices in Vietnam have increased by 59% in the past 5 years - Photo: NAM TRAN

Long time effort to buy a house

According to the survey results of batdongsan.com.vn announced at the Vietnam Real Estate Conference 2024 on December 3 in Hanoi, based on data comparing average salary with house prices in the past and present, it can be seen that not only Gen Z (young people born from 1997 - 2012), but young people of all times also face many difficulties in buying a house .

Accordingly, in 2004, with an average GDP per capita of about 1.8 million VND/month, a young person of the 7X generation spent about 31.3 years working and saving to have enough money to buy a ^60m2 apartment, selling price about 600 million VND/apartment, with a mobilization interest rate of 7.4%/year.

10 years later (2014), with an average GDP per capita of about 5.5 million VND/person, a young person of the 8X generation needs to work and save for 22.7 years to have enough money to buy a ^60m2 apartment, selling price of about 1.5 billion VND/apartment, interest rate of about 6%/year.

And by 2024, with an average GDP per capita of about 9.5 million VND/month, a young person born in the 90s needs to work and save for 25.8 years to buy an apartment of about 60 square ^meters , priced at about 3 billion VND, under the condition of a mobilization interest rate of 4.5%.

From the above comparison, Mr. Nguyen Quoc Anh - Deputy General Director of batdongsan.com.vn - believes that young people of all generations still need to make a long effort to be able to own a house.

According to Mr. Anh, Vietnamese people in particular and Asians in general still have high expectations for lifetime real estate ownership, with common reasons including high and stable yields, underdeveloped financial markets, social recognition, assets and a place to live for the family.

Notably, Vietnam is among the countries with the highest real estate ownership rate in the world with about 90% of total real estate, higher than some countries in the region such as Singapore (88%), Indonesia (84%) and higher than the US (66%), Australia (66%)...

Mr. Nguyen Quoc Anh believes that it is difficult for young people of any era to buy a house - Photo: B.NGOC

Three factors affecting house prices

Research survey of batdongsan.com.vn also shows that in the past 5 years, real estate prices in Vietnam increased by 59%, Singapore increased by 37%, America increased by 54%, Australia increased by 49%, Japan increased by 41%.

There are three factors affecting the upward trend of real estate prices in Vietnam in recent years, namely economy, management and society, which are the three main factors affecting real estate prices.

"Vietnam is a country with strong economic growth per capita and inflation. At the same time, the interest rate environment and investment efficiency of domestic channels both strengthen consumers' demand for real estate," Mr. Anh assessed.

Currently, the interest rate environment in Vietnam is gradually returning to a more favorable level and the proportion of accumulated assets in Vietnam's GDP is quite high, about 32.8%, ranking 27th in the world.

With their savings, Vietnamese people have several main investment channels such as financial markets, real estate, gold, foreign currency and savings.

Gold investment channels have many fluctuations, risks and large differences between domestic and international gold prices. Foreign currency and savings channels have quite low yields, around 9 - 13% in 2 years.

While real estate investment channels still have quite good returns in Vietnam, in the past 10 years the profit rate of apartments reached 197% (about 19.7%/year) and land reached 137% (about 13.7%/year).

Second, according to the Organization for Economic Cooperation and Development (OECD), the proportion of real estate tax in GDP by country in Vietnam is at 0.03%, much lower than other countries such as China, Singapore (1.5%), Japan (2.6%), and South Korea (4%).

Mr. Anh also affirmed that from the experience of some countries in the world, it can be seen that real estate tax is used as a policy to manage the market and optimize revenue for the country. This is also a trend that real estate investors must calculate in their financial plans for real estate investment in the coming years.

Source: https://tuoitre.vn/nguoi-tre-tich-cop-gan-26-nam-moi-du-tien-mua-nha-co-qua-lau-20241203131626184.htm