According to the Ministry of Construction, many countries use the ratio of house prices to income to assess the “reasonableness” of house prices.
The ration has increased by a fifth since 2019. This means that homes have become increasingly out of reach for Vietnamese over the past five years.
But the same trend is observed in many other countries, according to real estate agency Avison Young Vietnam.
During 2019-24, several Asian countries, such as the Philippines and Indonesia, recorded even higher house price-to-income growth rates than Vietnam, at 23.69%. and 36.83%.
Some other countries like South Korea experienced lower growth rates (13.21%).
Singapore and Hong Kong were outliers, with the ratio falling to 33.8% and 35.05%.
In the latter case it was 32.1.
A growing number of young Vietnamese are considering renting rather than buying a home, given the rising price-to-income ratio of real estate, Avison Young said.
But rents are also increasing, he notes.
In HCMC and Hanoi, the country’s two largest cities, housing rents and other related costs have increased over the past three years.
Data from the General Bureau of Statistics showed that the housing and construction materials price index rose 0.43 percent in February.
Specifically, costs for home maintenance materials increased by 0.48%, home repair services increased by 0.71%, electricity rates increased by 0.78%, and water rates increased by 0.78%. water of 1.73%.
As the cost of living, property prices and rents rise, an increasingly large proportion of urban residents’ income is spent on housing, a basic need that gradually tends to become a “luxury”, according to Avison Young.
The expansion of the urban population towards the outskirts, or even towards adjacent provinces, could make housing more accessible.
However, with an urbanization rate of 42.6%, and expected to reach 50% by 2030, the housing issue requires a more multidimensional approach, the report estimates.
Increasing the supply of housing is a sustainable way to stabilize prices and rents.
David Jackson, CEO of Avison Young Vietnam, said housing should be considered “essential infrastructure for social well-being”, along with roads, electricity and water.
“Thus, housing development policies should be developed with the aim of addressing social protection issues and be supported by long-term public investment funds as well as subsidized credit.”
Additionally, private developers should focus on properties that meet housing needs.
“The housing challenge will be even more serious if the properties on the real estate market do not match the real value they bring to the community and society, including meeting housing needs.”
