Vietnam’s housing affordability crisis has reached new heights, with the latest data revealing that the house price to income ratio (HPR) has surged to 32.9 years, up from 32.4 years in the previous year. This figure positions Vietnam among the top five countries globally with the most pressing affordability issues. According to Numbeo, this ratio is a critical indicator, calculated by comparing the average price of a 90-square-meter apartment against the median household income.
The latest numbers indicate alarming trends across key urban centers in Vietnam. HPR ratios stand at 24.7 in Hanoi and between 25-26 in other parts of Vietnam—significantly higher than the global average of 15. Reports from CBRE emphasize that both Hanoi and Ho Chi Minh City (HCMC) rank among the toughest Asian cities for prospective homebuyers, highlighting a growing disconnect between consumer income and housing prices.
In HCMC, apartment prices are nearing $3,000 per square meter, while residents average an annual income of merely $7,500. This staggering discrepancy suggests that many workers face greater challenges accessing housing than those in more expensive markets like Singapore. A recent survey conducted by the HCMC Institute for Development Studies revealed that families generally have the financial capacity to afford only 53% of their desired real estate within a two-year timeframe.
Economist Dr. Can Van Luc from BIDV attributes this escalating HPR to several factors, including a supply shortage, heightened living costs, and various unexpected expenses that have driven housing prices up, outpacing income growth. A representative from One Mount Group, which operates property platform OneHousing, added that land utilization in HCMC is nearly maxed out, creating significant barriers for new housing developments. Lengthy legal and approval processes further exacerbate the situation, delaying much-needed projects.
According to the Department of Construction, only about 3,800 apartments were launched last year, with an average price tag of VND 9.4 billion (approximately $361,200). Meanwhile, the Ho Chi Minh City Real Estate Association reports that affordable units priced below VND 3 billion are increasingly scarce, and options under VND 2 billion are becoming virtually non-existent.
Experts forecast that the gap in housing affordability will only widen in HCMC, driven by rising land use fees under new price frameworks and continued increases in construction costs.
This ongoing situation poses a significant challenge not only for consumers seeking affordable housing but also for the broader retail sector reliant on a stable, economically empowered consumer base. As prices soar and accessibility diminishes, retail news will likely continue to reflect these consumer concerns and shifts in spending behavior.
What is the current house price to income ratio in Vietnam?
The current HPR in Vietnam is 32.9 years, marking a notable increase from last year’s figure.
Why is housing becoming unaffordable in cities like Ho Chi Minh City?
Factors include a lack of housing supply, rising costs, and stagnant income growth, leading to stark disparities between housing prices and what consumers can afford.
What do experts predict for the future of housing affordability in HCMC?
Experts predict that the gap between housing prices and consumer income will likely widen due to increasing land use fees and rising construction costs, further complicating the affordability crisis.
