The dream of buying a house is getting farther and farther away

Four years ago, after saving 500 million VND, Ha and her husband started their dream of buying a house in Hanoi , but every time they almost had enough money, the house price skyrocketed to a new level.

At that time, the income of the office worker couple in Cau Giay district was about 20 million VND per month while they already had a child. Neither of their families could help, so they calculated that if they bought a house, they would have to borrow 600 million VND from the bank.

"I put all my money into buying a house and then pay interest every month. I'm afraid that if something unexpected happens in my life, I won't have any savings," said Ms. Ha, 34 years old. They decided to save for a few more years, and only when they have saved 2/3 of the apartment's value will they "put down the money."

But after Covid-19, apartment prices were pushed up again and the young couple's income was more precarious than before. They decided to take the risk of buying a house even though they didn't have enough money. The couple started looking for affordable apartment projects, asking brokers to send them the progress of interest and principal payments. But the price of an apartment that used to cost 20 million VND per square meter has now increased to 25 million.

"The money only increased by 100 million but the house increased by 300 million," Ha said.

Ms. Hoang Ha in a rented room in Cau Giay, Hanoi, March 2024. Photo: Pham Nga

Ha and her husband continued to work extra on Saturdays and Sundays to increase their income. At the end of last year, when they had about 900 million VND, they returned to buy the apartment they had previously looked at. But the price of that apartment had increased to more than 2 billion VND.

"After three years of hard work, the amount of money has almost doubled but is still not enough for half the value of the apartment, further away than before," said Ms. Ha.

Many times, she wanted to buy a house but could not find one. Ms. Ha was upset and blamed her husband for not paying attention. "Once, I accidentally read a message on my husband's phone and saw that he had contacted many brokers in different projects, but because the price was too high, he kept quiet," she said.

Similar to Ms. Ha, Mr. Duc Thanh and his wife, 30 years old, decided to move from their rented room in the inner city to rent an apartment in Hoai Duc. Their purpose is to live here for a few years to see if there is an apartment that suits their budget.

But even though they work several jobs at the same time and save money, the couple still cannot afford to buy a house because the price keeps increasing. "The apartment I'm renting is nearly 70 square meters, the price was 1.7 billion last September but this year it's more than 2 billion. Meanwhile, my wife and I have to work all year to save more than 100 million," he said.

Mr. Duc compares his family's income and house prices to the race between the tortoise and the hare. "Although I am as hard-working, diligent and patient as the tortoise, I am still far behind the house prices," he said.

Financial expert, Dr. Nguyen Tri Hieu said that the race but increasingly being left behind by families who dream of buying a house in the city like Ms. Hoang Ha or Mr. Thanh is not rare. The main reason is that income cannot keep up with the sharp increase in house prices.

According to statistics, Hanoi's average income per capita in 2023 is 151 million VND, an increase of about 6% per year compared to 2019. Meanwhile, apartment prices maintain an increase of about 14% per year. In 2023 alone, the average primary selling price in Hanoi increased by nearly 15% year-on-year, reaching 53 million VND per square meter.

Inner-city apartment prices have increased dramatically by 77% in the past year, equivalent to 45 years of average worker income. By 2024, Hanoi will still be among the world's most difficult capitals to buy a home.

According to the newly updated 2024 "House Price to Income Ratio" (HPR) by Serbia-based cost of living data platform Numbeo, the average house price in Vietnam is currently 23.7 times the average annual household income.

Avison Young Vietnam Company commented that when purchase prices, rents and living expenses all tend to increase, accounting for an increasingly high proportion of the total income of urban residents, the need for housing - which is an essential need - becomes more and more "distant".

An apartment building in Cau Giay, Hanoi. Housing prices are increasing, but old apartments and collective housing are still attracting customers. Photo : Pham Nga

Mr. Tran Luan, a real estate broker at a project in Ha Dong, said that with only 5 years of experience, he has witnessed a "huge leap" in house prices. "There are couples who spend a whole year looking for a house, but still cannot buy one, because prices increase every day, every month," he said.

Explaining the reason for the sharp increase in housing prices, Mr. Vo Huynh Tuan Kiet, Director of Housing Development Department of CBRE Vietnam, said that it was due to limited supply, while the selling prices of new projects were mostly in the high-end segment. The mid-range segment, which has a selling price more suitable for the majority of people's budget, accounts for a small proportion, while the affordable segment has completely disappeared.

Mr. Luan believes that besides the limited supply, the speculation of many rich people is also the reason for pushing up house prices. "If normal people only have one house to buy or sell, they only care about their own house. But rich people hold dozens of houses at once, they look for cheap places to buy, push the price really high to sell, thereby contributing to the increase in house prices," he said.

Dr. Nguyen Tri Hieu said that if households want to buy a house, they need to calculate or consult a financial expert to avoid the situation of not being able to pay the interest on the house or hesitating for a long time, causing the price to increase and then not being able to buy.

"Anyway, you should only buy a house when the principal and monthly interest payments do not exceed 60% of your income," experts advise.

He suggested that banks should have long-term loan programs, lower interest rates or fixed interest rates for families who want to buy a house. "Many projects advertise interest-free loans for 18 months or half a year, but then let them float with the market, like a trap," said Mr. Hieu.

That is what Ms. Hoang Ha and her husband are worried about, when they see many friends and acquaintances who have not yet had time to be happy because they bought a house but have to pay interest and principal exceeding their income. Even her close friend and her husband are stressed about having to pay 70% of their income in principal and interest each month, so they quarrel and argue constantly.

"The house suddenly became a burden. That's why I was afraid and hesitated. Many people said we were cowards, counting our chickens before they hatched, but when it came time to pay the debt, no one would stand up to pay for us," said Ms. Ha.

Not only the house prices, the legal status of many projects is unclear, lacking information, making ordinary people like her even more afraid.

Ms. Hoang Ha’s daughter is in first grade, and her second child is about to be born. Ms. Ha does not have enough money to buy an apartment in the suburbs, but she likes an apartment near her rented room. Like other apartments in Hanoi, the prices there are increasing. She and her husband still work overtime and save, hoping that after the fever, the apartment will return to its true value, so they can have their dream house.

"In the apartment building I like, there is a shrine. Every time I pass by, I pray that I will be able to buy a house there next year. I have been praying for three years now and it still hasn't worked," she said.

Pham Nga

Source: https://vnexpress.net/giac-mo-mua-nha-cang-voi-cang-xa-4717651.html