Buying a home in Vietnam’s two largest cities—Hanoi and Ho Chi Minh City—is becoming increasingly difficult. A recent report by CBRE reveals that these cities have some of the worst housing affordability ratios in Asia, surpassing even Singapore. With soaring property prices and relatively low-income levels, homeownership remains out of reach for many Vietnamese residents.

1. Property Prices vs. Income Levels

According to CBRE, the price-to-income ratio in Hanoi and Ho Chi Minh City is alarmingly high.

  • In Hanoi, the average apartment price is $2,600 per square meter (~66 million VND), while the annual income per capita is $6,300. This results in a price-to-income ratio of 2.4.
  • In Ho Chi Minh City, prices are even higher at $2,800 per square meter (~71 million VND), while the average income per capita is $7,500, creating a ratio of 2.7.
  • By comparison, cities like Seoul (2.3) and Manila (2.3) have better affordability ratios, while Hong Kong remains the most expensive with a ratio of 1.7.

With such high ratios, homeownership in Vietnam’s largest cities is significantly more challenging than in neighboring countries like Malaysia, where income levels are substantially higher while property prices remain similar.

2. How Long Does It Take to Own a Home?

A study by Batdongsan estimated that:

  • A person in Hanoi needs approximately 50 years of savings to buy a private house and 23 years for an apartment.
  • In Ho Chi Minh City, it takes 53 years for a private house and 24 years for an apartment.

For context, the IMF considers housing prices reasonable when they do not exceed 30 years of household income. In many developed countries, young professionals can purchase homes within 10–15 years of working. In Vietnam, however, this period extends to 23–25 years, making homeownership nearly impossible for the average worker.

3. Soaring Property Prices in 2024

The Ministry of Construction reported that:

  • Apartment prices in Hanoi have surged 40–50% compared to 2023.
  • Ho Chi Minh City saw an increase of 20–30%.
  • Some projects even recorded higher spikes.

With demand exceeding supply, even middle- to high-income earners struggle to afford homes.

4. Why Are Homes Becoming More Expensive?

Several factors are driving up real estate prices:

Limited Land Supply

Land in major urban centers is scarce, and development projects are heavily regulated. As a result, developers focus on high-end properties, making affordable housing options increasingly rare.

Increased Construction Costs

Building costs, including materials, labor, and land acquisition, have risen sharply. Factors such as inflation and supply chain disruptions continue to push expenses higher.

Growing Demand vs. Low Supply

Vietnam’s urban population is rising, with more people moving to Hanoi and Ho Chi Minh City. The housing supply, however, has not kept up with demand, leading to price increases.

Stricter Loan Regulations

Banks have tightened mortgage policies, making it harder for people to qualify for home loans. This forces buyers to rely on savings, further delaying their ability to purchase property.

5. Can Prices Decrease in the Future?

Experts believe that real estate prices in major cities are unlikely to drop significantly in the short term due to:

  • Limited land availability
  • Rising development costs
  • High demand for urban housing
  • Government policies affecting supply

According to CBRE, 90% of newly launched apartments in 2024 will be in the high-end and luxury segments, priced at over $60 million VND/m². This leaves minimal options for middle-income buyers.

6. Possible Solutions for Housing Affordability

To address this issue, experts suggest:

  • Expanding urban infrastructure: Encouraging people to move to suburban areas where property is more affordable.
  • Government support: Introducing housing policies for low- and middle-income earners.
  • Incentives for affordable housing: Encouraging developers to build more mid-range housing options.

Conclusion

Hanoi and Ho Chi Minh City are among the most difficult places in Asia to buy a home due to their high property prices and relatively low income levels. With current trends, real estate prices are expected to continue rising, making homeownership an unattainable dream for many. Potential buyers should explore alternative options, such as suburban housing and government-backed programs, to increase their chances of owning property in Vietnam.