House prices are skyrocketing, making the young generation’s dream of owning real estate increasingly distant. The income gap compared to house prices is getting bigger and bigger, not to mention the high cost of living, forcing many young people to give up their dream of settling in urban areas.
House prices far exceed savings
After a period of hard work, in early 2023, Ms. Thuong’s family (Thanh Tri, Hanoi) saved nearly 1 billion VND and deposited it in bank savings with an interest rate of 5.3%/year. By mid-2023, intending to buy a house, she searched and consulted an apartment at Rose Town 79 Ngoc Hoi, 52 m2 wide, 2-bedroom design for sale for about 1.8 VND.
Thus, if they decide to buy this house, the couple must withdraw their savings of 1 billion VND and borrow about 800 million VND more. However, afraid of the burden of monthly debt payments and long-term financial pressure, Ms. Thuong postponed her plan to buy a house. The dream of owning a home is still open.
By the middle of this year, her family returned to the idea of buying a house again. Although she heard that house prices were continuously increasing, Ms. Thuong was still surprised when house prices in the area she wanted had established a new price level, house prices were escalating each week, far exceeding her family’s savings. .
“I really regret not withdrawing my savings to buy a house sooner. Up to now, the bank interest has only been a few tens of million dong, but the house I asked about last year has increased from 1.8 billion to more than 3 billion VND,” Ms. Thuong sadly recounted.
History of apartment selling prices at Rose Town 79 Ngoc Hoi (Source Batdongsan.com.vn).
Surveying the history of apartment price fluctuations at Rose Town 79 Ngoc Hoi, selling prices have increased over 42.3% in the past 2 years. As of September 2024, the popular selling price is about 55.5 million VND/m2. Notably, there was a time when there was a sudden sharp decrease in June 2023, the price fluctuated around 25 – 38 million VND/m2, however, after that it quickly rebounded and showed no signs of slowing down.
Unlike Ms. Thuong’s case, for a single person like Mr. Hai (Ha Dong, Hanoi), the average salary is 30 million VND/month, excluding living expenses, saving about 20 million VND per month. Thus, in one year it is expected to save 240 million VND. If you want to buy a house of 4 billion VND, it will take nearly 20 years.
Many families and individuals living in big cities like Hanoi and Ho Chi Minh City fall into the above situations. Procrastination and indecisive thinking lead to house prices increasingly exceeding savings. Not to mention, a series of other objective factors still show that in the short term, house prices cannot decrease immediately.
House prices are forecast to be difficult to decrease in the future
According to data from Savills Vietnam Research Department, house prices for sale in Hanoi are still on the rise. In the third quarter of 2024, the primary selling price is currently at 69 million VND/m2, up 6% over the previous quarter and 28% over the same period last year. On the secondary market, the average price of apartments in the third quarter was 51 million VND/m2, an increase of 10% compared to the previous quarter and 41% compared to last year.
Also according to this unit, in large cities such as Ho Chi Minh City and Hanoi, the housing market currently lacks supply at reasonable prices when the market share of this segment has decreased from 60% in 2016 to only 35% by 2024, primary apartments under 2 billion VND will completely disappear.
Ms. Cao Thi Thanh Huong, Senior Manager of Savills Research Department, said: “If we can save up to 40% of our monthly income, an average income household will need more than 30 years to be able to save up to 40% of our monthly income.” Buy a house on the condition that house prices do not continue to increase. But with the continuous growth of the market, this is unrealistic, causing social inequality to increase and potentially destabilizing long-term security.”
Sharing the same opinion, at a recent conference, Mr. Su Ngoc Khuong, Senior Director of Savills Vietnam Investment Consulting Department also expressed concern: “Young people today will have difficulty accessing and buying home. Especially the generation born in 2000 (Gen Z), at the present time, after graduating from university and going to work, it takes 30 years to be able to buy a house. For really good people, it is also necessary. somewhere 20 years”.