The real estate markets of Hanoi and Ho Chi Minh City are becoming increasingly challenging environments for prospective homeowners, marked by sky-high property prices and stagnant income growth. A recent analysis by CBRE has found both cities at the top of Asia's housing affordability rankings, surpassing even Singapore.
According to reports, prices for apartments have touched USD 2,600 per square meter (approximately 66 million VND/m²) in Hanoi, whereas Ho Chi Minh City sees prices rise to around USD 2,800 (approximately 71 million VND/m²). The stark reality is underscored by the average GDP per capita, which stands at about USD 6,300 per year for Hanoi and USD 7,500 for Ho Chi Minh City. This leads to income-to-price ratios of 2.4 and 2.7 respectively, indicating significant barriers for individuals seeking to purchase homes.
The implications of such disparity are stark, with Ho Chi Minh City's housing market still deemed slightly more accessible than its northern counterpart. Consider Kuala Lumpur, Malaysia, where housing prices are roughly on par with those of Hanoi, yet locals enjoy average income levels of approximately USD 28,000, significantly higher than those residing in Hanoi.
"The demand for housing has increased, but the supply remains critically low," stated Giang Huỳnh, Director of the Research Department at Savills Vietnam.
Experts have highlighted how the real estate shortage is driving up costs unsustainably. The outlook for the housing market across these two cities suggests limited supply persists. Despite plans to bolster new developments, reports from 2024 suggest the market's supply is at its lowest point in five years. Most available projects fall within the mid-range segment, exacerbated by fewer affordable options.
Reports also detail how households with the highest incomes (between 13 to 20 million VND monthly) still face challenges acquiring homes. The analysis assumes typical two-member working households, with estimates showing combined monthly earnings of about 30 million VND. Following the common financial guideline to not allocate more than one-third of income for housing, these families would be limited to spending around 6.7 million VND on monthly housing costs, equaling 80 million VND annually.
Yet, the cost of purchasing even modest-sized apartments, typically around 60m², ranges between 2.5 to 3.5 billion VND, far outstripping affordability for many. If these households were to secure financing for 70% of such costs, under current interest rates of around 8% annually for 20 years, their monthly payments could surge past 25 million VND—essentially wiping out their capacity to manage other living expenses.
More alarmingly, Hoàng Kim Hoài, General Director of Phúc Điền Land, predicted real estate prices will maintain higher levels—roughly 30% above 2019 figures—thanks to market speculations by developers taking advantage of dwindling supply. “New projects are overpriced due to market speculation,” he commented.
Data from Batdongsan.com.vn indicates substantial public concern over rising prices and ownership difficulties, with Vietnam experiencing real estate growth of 59% from 2019 to 2024, outpacing places like the U.S. (54%) and Australia (49%).
To afford housing at current market rates, residents face extreme requirements, highlighted by the finding of requiring 169 years of labor to buy just one home in Hanoi, or 23 years if investing in apartment blocks. Such figures lay bare the extreme lengths to which locals must go to realize the dream of home ownership.
With the market anticipated to slowly improve toward the end of 2025, it remains clear significant hurdles will continue to plague residents of Hanoi and Ho Chi Minh City. The expectation of persistent high prices alongside limited availability means homeownership will likely remain out of reach, keeping these cities on the list of the most challenging housing markets not only regionally but worldwide.