### The Growing Divide: Housing Affordability in Vietnam
In recent years, the landscape of housing in Vietnam has dramatically shifted, particularly when it comes to affordability. A pivotal examination of the housing market reveals stark contrasts between the years 2014 and 2023, especially for individuals working in professions often considered among the more lucrative sectors, such as banking.
### A Closer Look at the Numbers
In 2014, the cost of a 70-square-meter apartment categorized in the affordable segment was approximately six years’ worth of salaries for a typical bank employee. Fast forward to 2023, and that same employee would find themselves needing to fork out an astonishing nine years’ worth of income to acquire the same dwelling. The high-end segment paints an even grimmer picture, where it now takes a staggering 31 years of earnings—up from just 14 years in 2014.
### Wage Growth vs. Property Prices
This stark increase in property prices juxtaposes a modest rise in wages, with the average worker’s income seeing an annual increase of only 7% from 2014 to 2022. This growth pales in comparison to property prices which soared—11% annually in the affordable segment, and even higher in mid- and high-priced segments, at 10% and 16% respectively. This disproportionate rise creates a significant housing burden for the average worker, who, with a monthly salary of VND7.6 million, now faces a daunting 21-23 years of savings to purchase a modest 55-square-meter apartment.
### The Striking Ratio of Housing Prices
Interestingly, Vietnam’s house price-to-income ratio is reported as one of the highest in Southeast Asia, standing at a whopping 22.8. This figure is notably double that of Malaysia and exceeds ratios found in some developed countries, including Japan, Singapore, and South Korea. Since 2014, this ratio has escalated by 27%, intensifying the challenge of homeownership for many.
### Growing Wealth Disparity
Le Kien Cuong and fellow researchers from the Ho Chi Minh City University of Banking have expressed concerns that this rapid ascent in property prices, outstripping wage growth, threatens to exacerbate social inequality. Individuals increasingly spend their incomes on rent rather than saving for a future home, eroding their potential for wealth accumulation and solidifying the wealth gap.
### The Pressure of Speculation
Former Deputy Minister of Natural Resources and Environment, Dang Hung Vo, emphasizes that the swift rise in housing costs could create significant pressure on social welfare systems. He notes a systemic issue where speculators contribute to inflating prices rather than investing in genuine property development. Vo argues that without effective measures to curb speculation and rectify imbalances within the housing market, the property sector may find itself stagnating.
### Supply Issues and the Legal Landscape
Experts like Giang Huynh from Savills Vietnam have highlighted that housing supply in major cities like Ho Chi Minh City (HCMC) and Hanoi is struggling to keep pace with the skyrocketing demand. Contributing factors include legal constraints that delay new projects, alongside rising land prices and construction costs, which further inflate property prices. Between 2015 and 2023, for instance, the construction price index in HCMC climbed from 100 to 123, prompting developers to increase their housing prices.
### The Focus on Higher Segments
Economist Dinh The Hien notes that the primary focus of new housing projects has been in mid- and high-priced segments, further widening the gap between what the average worker can afford and the current market prices. This trend sets a challenging precedent for home buyers, many of whom are just trying to secure a modest living space.
### Potential Solutions and Roadblocks
Vo suggests that implementing taxes on individuals owning multiple properties could help mitigate speculation and ease the burden on first-time buyers. However, he underscores the necessity for a transparent and efficient database to support such measures.
### Conclusion
The challenges facing the housing market in Vietnam are multifaceted and interlinked, with implications for social equity, economic stability, and individual livelihood. As wages lag behind rising costs, the dream of homeownership remains just that for many—a dream that feels increasingly out of reach.