Home buying in Vietnam: Mission impossible
With Vietnam’s ridiculously high housing prices, the average income earner needs to accumulate 160 years of salary to buy a home.
Entrepreneurs and the real estate industry are making similar arguments: They use the high cost of homes in the U.S., Japan, Shanghai and other foreign countries to justify high housing prices in Vietnam. But how does the average income in Vietnam compare to other parts of the world?
Here’s a more specific example: the average French income is about €40,000 (US$42,132) a year. Simply put, with about 12 years-worth of income, they have already earned enough to buy a house in a city center.
In Vietnam, a 50m2 downtown house costs at least around $500,000, sometimes even higher. However, the average income of Vietnamese is just over $3,000 a year. Thus, it will take us more than 160 years-worth of income to purchase a house. So, are housing prices in our country reasonable?
I’m not trying to brag, but if I calculate the full taxed payment income, I can be considered a person with a high and stable income in Vietnam (about VND1.5 billion ~ $63,300 a year). However, in reality, to buy a house not too close to downtown Hanoi (specifically Ha Dong District), it took me seven years of savings to be able to afford it. Meanwhile, 90% of Vietnamese people do not make as much as I do. So, how long will it take for them to finally purchase a house?
In addition to the house in Ha Dong, I also have a small apartment that I put up for rent. So I have no reason to be jealous of anyone who is getting rich from real estate investments. I am just giving my opinion about the fact that if a high-earner like me still struggles to buy a house, then what about others who do not have as much as my income, meaning the majority of Vietnamese people ?
In short, the state’s attempt to lower real estate prices with policies such as taxation and credit restrictions is a reasonable solution. Because if we don’t do anything and let the market sort itself out, many Vietnamese will never be able to buy houses. If we only rely on buying and selling land to each other to make a profit, how can we progress together as a society ?
By QP – VnExpress.net – December 13, 2022