Vietnam’s average house price now stands at 23.75 times the annual household income, a slight uptick from last year’s 23.5, as reported by Serbia-based statistics site Numbeo.
The Ministry of Construction notes that many countries use the house-price-to-income ratio to gauge the “reasonableness” of housing prices.
This ratio has surged by a fifth since 2019, indicating that housing has become increasingly unaffordable for Vietnamese citizens over the past five years. Avison Young Vietnam, a real estate agency, observes a similar trend in various other countries.
From 2019 to 2024, several Asian nations, including the Philippines and Indonesia, witnessed even higher growth rates in the house-price-to-income ratio than Vietnam, with rates of 23.69% and 36.83%, respectively. Conversely, South Korea experienced a lower growth rate of 13.21%. Singapore and Hong Kong bucked the trend, with their ratios decreasing by 33.8% and 35.05%.
In Vietnam’s largest cities, Ho Chi Minh City and Hanoi, house rents and related costs have been steadily climbing for the past three years. February data from the General Statistics Office revealed a 0.43% increase in the housing and construction materials price index.
Specifically, the costs of house maintenance materials rose by 0.48%, home repair services by 0.71%, electricity tariffs by 0.78%, and water tariffs by 1.73%.
As living expenses, house prices, and rents continue to rise, an increasing portion of urban residents’ incomes are allocated to housing, gradually transforming it from a necessity into a “luxury,” according to Avison Young. Expanding urban populations to suburban areas or adjacent provinces could potentially make housing more accessible.
However, with an urbanization rate of 42.6%, projected to reach 50% by 2030, addressing the housing issue necessitates a multifaceted approach. Avison Young emphasizes that increasing housing supply is a sustainable strategy to stabilize prices and rents.
David Jackson, CEO of Avison Young Vietnam, advocates for viewing housing as “essential infrastructure for social welfare,” akin to roads, electricity, and water.
