Hanoi and Ho Chi Minh City (HCMC) have emerged as two of Asia’s least affordable cities for homebuyers, surpassing even Singapore in terms of the gap between housing prices and income levels, according to a report by CBRE.
The study found that Hanoi’s income-to-housing price ratio is 2.4, while in HCMC, it is 2.7—lower than in Singapore (2.3) and Seoul (1.7). With average apartment prices at $2,600 per square meter in Hanoi and $2,800 in HCMC, homeownership remains out of reach for most residents earning $6,300–$7,500 per year.
Why Is Homeownership So Difficult in Vietnam?
Although housing prices in Vietnam are similar to those in other Asian countries, lower income levels make affordability a serious issue. For example, Kuala Lumpur residents earn four times more than those in Hanoi, yet property prices are similar.
A separate Batdongsan report estimates that:
- A Hanoi resident would need 50 years of income to buy a house and 23 years for an apartment.
- In HCMC, those figures increase to 53 years and 24 years.
For comparison, the International Monetary Fund (IMF) considers housing affordable if it requires no more than 30 years of household income.
“In most developed countries, young professionals can buy a home within 10–15 years. In Vietnam, it takes nearly an entire career—23 to 25 years—to afford an apartment,” said Sophie Dao, Senior Partner at GBS. “This significantly limits social mobility and financial stability.”
Housing Prices Surge Amid Limited Supply
With apartment prices in Hanoi and HCMC ranging from VND40–70 million ($1,594–2,791) per square meter, a 60-square-meter unit costs between VND2.5–3.5 billion ($99,000–138,000).
Even among the top 20% of income earners in Vietnam (earning VND13–20 million per month), purchasing a home remains a challenge. For middle- and low-income groups, homeownership is nearly impossible.
A 2024 Ministry of Construction report revealed that:
- Hanoi apartment prices rose by 40–50% from 2023.
- HCMC prices increased by 20–30%, with some projects seeing even steeper hikes.
“Even if prices were halved, many middle- and low-income earners would still struggle to buy a home,” said Nguyen Van Dinh, Chairman of the Vietnam Association of Realtors (VARS).
The affordability crisis is largely due to government policies on real estate financing and land regulations, which have severely restricted housing supply since 2018.
“The shortage of affordable housing is not just a market issue—it’s a policy challenge,” noted Sophie Dao. “We need incentives for developers to build mid-range housing and better mortgage support for homebuyers.”
Luxury Housing Dominates New Development
Despite the urgent need for affordable housing, most new developments target high-end buyers.
According to CBRE Vietnam, approximately 40,000 new apartments will be launched in Hanoi and HCMC in 2024, but 90% of them will be high-end or luxury units, priced above VND60 million ($2,400) per square meter.
“Currently, there are no signs that prices will decline in the short term,” said Duong Thuy Dung, Managing Director of CBRE Vietnam. Rising land costs, labor expenses, and construction fees will likely push prices even higher.
The Road Ahead: Infrastructure & Urban Decentralization
In the long term, expanding infrastructure and promoting suburban development could help ease the affordability crisis.
“Encouraging population shifts to suburban areas through better public transportation and infrastructure could reduce housing pressure in major cities,” suggested Sophie Dao.
However, without bold policy reforms and long-term investment, housing in Hanoi and HCMC will remain out of reach for most residents
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Source: Vietnam Insider