To buy a house on the street, people in Hanoi and Ho Chi Minh City have to spend frugally for 169 years to buy it.

Batdongsan.com.vn has just released data on the Vietnamese real estate market in the first two months of 2023. Accordingly, the average selling price of different types of housing in Hanoi is currently 22.8 billion VND/unit for townhouses, 17.8 billion VND/unit for villas, 6.3 billion VND/unit for private houses and 3.1 billion VND/unit for apartments.

Meanwhile, the average income of Hanoi workers in 2023 is estimated at 135 million VND/year. Thus, to own a house on the street in Hanoi, the capital's people need to "work hard" for 169 years, to own a private house it takes 132 years, to buy a private house it takes 47 years, and to buy an apartment it takes 23 years (assuming they use all their income to buy a house).

People in Hanoi and Ho Chi Minh City have to spend 169 years to buy a house in the street. Photo 1 — To own a house on the street in Hanoi and Ho Chi Minh City, people need to work for 169 years. (Photo: Viet Vu)

Meanwhile, in Ho Chi Minh City, the average selling price of a street-front house is 25 billion VND, equivalent to 169 years of average income of workers in this city. The average price of each villa is 24 billion VND, equivalent to 162 years of income of people. The price of a private house is about 7.9 billion VND/unit, equivalent to 53 years of income. Meanwhile, apartments are sold at an average price of 3.5 billion VND/unit, nearly equal to 24 years of income. The average income of workers in Ho Chi Minh City in 2023 is estimated by Batdongsan.com.vn to be about 148 million VND/year.

Although the number of years to save to buy apartments in Hanoi and Ho Chi Minh City is more than 20 years, much lower than other types, this is still a large number. According to data from market research company Statista, the average price of an apartment in the Tokyo Capital Area (Japan) in 2019 was only equivalent to 8.8 years of the average household income in Tokyo and the surrounding area. Meanwhile, the price of a primary apartment in Singapore in 2020 was equivalent to 15.4 years of the average household income.

Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, commented that buying a house in big cities in Vietnam will become increasingly difficult, so people need to have a plan to accumulate and increase their income to buy a house soon instead of waiting for prices to drop sharply.

Batdongsan.com.vn's report shows that Vietnam ranks first in Southeast Asia in terms of the gap between housing prices and average income of workers. From 2018 to 2021, the gap between real estate prices and average income of Vietnamese people has been increasing continuously, surpassing Singapore. Meanwhile, this index in Indonesia, Malaysia and Thailand shows signs of decreasing. Mr. Nguyen Quoc Anh predicts: "Vietnam's real estate prices will hardly decrease and the gap between housing prices and average income of people will continue to increase."

However, people's actual income may be higher than the statistics, many Vietnamese people do not live on salary alone. The Vietnam Real Estate Consumer Sentiment Report (CSS) in early 2023 by Batdongsan.com.vn reflects that 80% of survey participants own at least one property and 66 - 87% of them plan to buy a second or third property within the next year.

Mr. Quoc Anh also gave some notes to real estate buyers before "putting down money" for this valuable asset.

First, you need to spend time researching and surveying the area and house you want to buy, and consider whether the traffic and infrastructure are convenient or not.

Second, it is necessary to carefully calculate financial plans, especially for those who use financial leverage, in the context of bank interest rates still being high.

Third, buyers should research many clear and reputable sources of information as well as consult with experienced people and experts in the real estate field.

Data from Batdongsan.com.vn also shows that the rental segment is still a bright spot in the real estate market in the first two months of 2023. The demand for renting real estate nationwide increased by 24%, with the highest increase in street-front houses and shops (up 61% - 62%). In contrast, the demand for buying real estate decreased by 23% compared to the same period last year.

Apartments are the only type of real estate for sale that has seen an increase in interest in the first two months of this year, with a slight increase of 3% compared to the same period last year. Meanwhile, land plots, private houses, townhouses, and villas all decreased from 17% - 54%. This signal partly reflects the trend that customers have been searching and listening more about opportunities to buy apartments. Bank interest rates have shown signs of decreasing, along with recent policies and guidelines to support the real estate market, which have had a quite positive impact on the psychology of home buyers.

In the first month of this year, the average rental price of apartments in Hanoi and Ho Chi Minh City increased by 8% and 4% respectively compared to 2022, hovering around VND13 million/apartment/month. The average selling price of apartments has not decreased despite many barriers to liquidity. Even the asking price of apartments in Hanoi in the first two months of 2023 still increased by 9% - 16% in all segments compared to the same period last year, and the strongest increase was in the mid-range product line. Ho Chi Minh City apartments also increased by 3% - 6% for the mid-range and high-end segments.

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