Real Estate Prices Continue to Rise, Making Saving for a House Even Harder

Renting a home in Hai Ba Trung, Hanoi, Mr. Duong and his wife have a combined average monthly income of around 40 million VND. After deducting all expenses, they can only save about 20% of their income each month towards their dream of buying a house. Mr. Duong mentioned that although their income is decent compared to many others, saving for a house is still a distant goal.

“Honestly, our current income only covers living expenses and schooling for one child. The savings amount is not stable as some months we have unexpected medical expenses, holidays, or family emergencies. Therefore, unless we work overtime or find additional sources of income, it will take us at least 50 years to save enough to purchase a 3 billion VND house in Hanoi,” shared Mr. Duong.

Unlike Mr. Duong, Mr. Hai’s family (located in Ha Dong, Hanoi) stated that without children, they can save around 20 million VND per month. Therefore, it would take them nearly 20 years to accumulate over 200 million VND, which is still a long way from the 4 billion VND they need to buy a house.

For single individuals like Ms. Thuong (Cau Giay, Hanoi), who earn approximately 15 million VND per month, saving 8 million VND per month after deducting rent and living expenses is a great challenge. With such a limited amount, she questions whether she will ever be able to afford a condominium in the city.

In reality, property prices in Vietnam have significantly outpaced the average income of its citizens, making homeownership increasingly difficult. Furthermore, house prices are forecasted to continue rising in 2024.

According to a survey by real estate research company CBRE in 2023, the apartment market in Hanoi and Ho Chi Minh City remains at a high level. Specifically, Hanoi’s primary market prices averaged 53 million VND per square meter (excluding VAT and maintenance fees), representing a quarterly increase of 4.6% and an annual increase of 14.6%. On the other hand, the primary market prices for apartments in Ho Chi Minh City decreased by 1.7% to over 61 million VND per square meter in 2023.

In the secondary market, the average selling price for condominiums in Hanoi reached 33 million VND per square meter in Q4 2023, reflecting a 5% increase compared to the previous year. Meanwhile, Ho Chi Minh City recorded prices of 45 million VND per square meter for apartments and 140 million VND per square meter for low-rise housing projects.

A study by Savills Vietnam showed that in 2023, the average per capita income in Hanoi was 150 million VND per year, with an annual growth rate of 6% since 2019. In contrast, the average apartment price increased by 13% per year during the same period.

With high living costs related to housing, food, transportation, healthcare, education, etc., it is clear that saving enough money to own a house is a significant challenge for many families. Although there is a high demand for housing and an improvement in both quantity and quality of supply, purchasing a house has never been easy.

In other countries, the government has implemented various solutions to address this issue, such as long-term rent-to-own agreements, making it easier for people to access homeownership. However, in Vietnam, there have been limited developments in social housing, and the supply remains insufficient.

In addition to developing social housing, the government has taken measures to direct credit towards homebuyers and provide low-interest loan packages. Notably, three important real estate laws (Housing Law, Land Law, and Real Estate Business Law), which will come into effect on January 1, 2025, are expected to enhance legal protections and comprehensively safeguard the rights of homebuyers.

According to experts, in order for people to own homes, developers must not only provide quality products but also offer reasonable sales policies and incentives. Additionally, it is necessary to gradually limit market distortions caused by high price speculation and other factors. These key steps are crucial for maintaining a sustainable market and ensuring that homeownership becomes a reality for the people.