The rising cost of urban living and stagnant income levels have made homeownership a significant challenge for residents of Vietnam’s two largest cities, Hanoi and Ho Chi Minh City (HCMC).
According to recent statistics from CBRE, residents of Hong Kong face the most difficult housing market, with house prices about 1.7 times higher than in other urban centers. Following closely are Manila (Philippines) and Seoul (South Korea), with housing costs approximately 2.3 times the average. Hanoi and HCMC, however, are not far behind these cities, making homeownership increasingly out of reach for many Vietnamese urban dwellers.
In Hanoi, apartment prices currently average around 2,600 USD per square meter (approximately 66 million VND/m2, inclusive of VAT and maintenance fees). With the city’s GDP per capita standing at approximately 6,300 USD, this cost presents a substantial barrier for average-income residents. Meanwhile, HCMC, with a slightly higher GDP per capita of around 7,500 USD, also has higher apartment prices averaging 2,800 USD per square meter (approximately 71 million VND/m2). This translates to an affordability ratio—measuring the gap between average income and housing costs—of around 2.4 times in Hanoi and 2.7 times in HCMC.
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Tube houses in Hanoi @ AFP PHOTO
For comparison, in other major cities around the world, the average house price typically ranges between five and seven times the average income. Yet, in Vietnam, the figure climbs dramatically, with house prices in Hanoi and HCMC costing between 20 to 25 times the annual income of an average resident. This disparity not only underscores the difficulty of homeownership but also reveals a significant economic paradox and, for many, a financial tragedy.
Several factors contribute to this housing crisis in Vietnam. The rapid urbanization of Hanoi and HCMC has fueled demand for housing, but supply has not kept pace due to land scarcity, regulatory hurdles, and rising construction costs. Additionally, the interest in real estate as a long-term investment has driven property prices even higher, further alienating middle- and low-income earners from the housing market.
The government has recognized the severity of the issue, with plans to increase the supply of affordable housing and expand access to housing loans. However, experts warn that unless comprehensive solutions addressing both income growth and housing affordability are implemented, the dream of homeownership will remain out of reach for many urban Vietnamese.
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Source: Vietnam Insider