In recent years, the dream of homeownership has become increasingly elusive for many couples, especially those earning a combined monthly income of 30 million VND. This amount, considered substantial in Vietnam, is still insufficient for buying homes in bustling metropolises like Hanoi and Ho Chi Minh City. Adhering to the common financial guideline of allocating no more than one-third of income on housing costs forces these high-earning households into a frustrating dilemma.
A recent report from the Vietnam Association of Realtors (VARS) sheds light on the income dynamics in major cities. Households in the top 20% income bracket (Group 5) report an average monthly per capita income ranging from 14.47 million VND in Hanoi to 18.38 million VND in Binh Duong. While these figures suggest that families in this income category should be able to afford homes without government assistance, the ground reality tells a different story.
Let’s unpack the math. For a typical family of two in this demographic, the combined monthly income sits at 30 million VND, translating to an annual income of 360 million VND. Following housing affordability guidelines, they could reasonably allocate about 80 million VND a year (or roughly 6.7 million VND monthly) towards housing expenses. However, when you consider the escalating property prices in these urban areas, the affordability crisis becomes apparent.
In Hanoi and Ho Chi Minh City, commercial apartment prices vary between 40–70 million VND per square meter, influenced heavily by the location and building quality. For instance, a modest 60m² apartment now commands between 2.5 billion and 3.5 billion VND. For a household aspiring to buy a 3.5 billion VND apartment, relying on a typical financing structure, they might think of securing a bank loan covering 70% of the price (approximately 2.45 billion VND) at an 8% annual interest rate over a period of 20 years. This translates to a monthly repayment of about 25 to 27 million VND—significantly exceeding their budget cap.
The VARS report highlights a widening chasm between income growth and housing prices, underscoring the challenges faced by middle and upper-middle-class families. Since the pandemic, property prices have surged, often setting a new baseline that is 30% higher than pre-2019 levels. The Ministry of Construction corroborates this, noting a steady quarterly rise in new apartment project prices of around 4–6% and an annual increase of 22–25% as of Q3 2024.
A dive into the specifics reveals alarming trends: average apartment prices escalated from 34–37 million VND/m² in 2021 to between 45–51 million VND/m² in 2024. Conversely, urban per capita income gained a mere 4% compared to 2019, indicating a stark imbalance. Within Group 5, the average income in cities like Hanoi and Da Nang barely changed, increasing by only 3% and 7%, respectively. Shockingly, HCMC even experienced a negative income growth of 8% during this period.
This disconnect between what families earn and the soaring property prices has dramatically impacted their ability to secure adequate housing options. A vital contributing factor to the unaffordability crisis stems from the limited availability of reasonably-priced housing. Few projects exist with prices below 30 million VND/m², pushing many, including affluent households, out of the market.
Add to this the speculative behavior in the real estate sector. Many investors are acquiring properties not for personal use, but as a means to sit on them and await price appreciations, effectively leaving homes vacant. This further worsens the supply-demand imbalance and drives prices skyward.