Average house price in HCMC exceeds $296,000

By Vu Pham, Huong Dung
Wed, August 23, 2023 | 9:44 am GMT+7

The median house price in Ho Chi Minh City has reached more than VND7 billion ($296,000), 32.5 times higher than the average annual household income of just VND217 million ($9,110), according to a report by Singapore-based research firm The Urban Land Institute (ULI).

House price-to-income ratio tops Asia

According to the ULI's 2023 Asia Pacific Home Attainability Index report, Ho Chi Minh City and Hanoi have two of the highest median house price-to-income ratios in Asia.

HCMC ranks second in Asia in the house price-to-income ratio, at 32.5, just behind China's Shenzhen city (35) and even higher than major cities like Beijing and Shanghai (China), Seoul (South Korea) and Tokyo (Japan).

The ratio is 18.3 in Hanoi, where the median home price is $182,300 per unit, 38% lower than that of HCMC. Meanwhile, the ratio is 17.3 in Seoul, 16.1 in Tokyo and 13.7 in Singapore.

A customer studies a housing project in Ho Chi Minh City. Photo by The Investor/Vu Pham.

A customer studies a housing project in Ho Chi Minh City. Photo by The Investor/Vu Pham.

According to property consultancy firm Savills Vietnam, Vietnam's current urbanization rate of 28% depicts the ongoing movement to major cities and neighboring localities, driving housing demand, especially in big cities such as Ho Chi Minh City, Da Nang and Hanoi. However, this increasing demand often conflicts with affordability, creating a complicated housing picture.

Affordable housing is defined as housing that fits people’s incomes and financial capacity. Currently, affordable housing products in the market are known as Grade C apartments, affordable land plots or even workers' houses near industrial parks.

In recent years, affordable housing supply has been scarce, although this segment has particularly strong demand. In the first half of this year, Grade C apartments accounted for 4% of total supply and 62% of total consumption in HCMC.

It is expected that in the second half, about 3,295 new Grade C apartments will be put up for sale, equivalent to 39% of the city’s total supply.

The southern economic hub is suitable for young high-income workers or foreigners working in Vietnam as its average monthly apartment rent is $592.

Experts say that rent is only considered affordable when housing costs account for about 30% of a person's total monthly income. Meanwhile rental returns from affordable housing products such as worker housing are relatively low, so demand and occupancy rates are high.

Affordable housing the only choice

Giang Huynh, head of Research & S22M, Savills Advisory Ho Chi Minh City, said that most people in HCMC can only afford Grade C apartments.

However, there is a relatively low supply of affordable apartments priced from VND2-4 billion ($83,963-167,926). Previously, this product line accounted for about 60% of the market's supply, but now it makes up only 25%. Limited supply makes it difficult for people to own a house.

Therefore, the government’s support policies are the key to solving the "problem" of housing affordability, she said, adding the experience of many different countries has showed the positive effects of housing solutions on socio-economic development.

This expert said unlike social housing with strict planning requirements and a profit limit of 10%, private investors are still able to build affordable housing for profit. China and India have thriving affordable housing and worker housing markets which are lucrative for private investors.

“But, in Vietnam, developers have been looking for opportunities in other segments and are yet to tap the affordable housing segment,” she noted.

She cited Singapore, where a program run by the Housing & Development Board (HDB), combined with the new loan policy of the Central Provident Fund, has successfully raised the home ownership rate to nearly 90%.

Giang Huynh said that Vietnam can move towards a more accessible and affordable housing market if it creates a favorable environment for both investors and buyers. In particular, the government should consider taxes to limit speculation and increase the land fund for low-cost housing development, demonstrating its commitment to promoting a stable and sustainable housing market that benefits home buyers.

As for social housing, experts emphasized that this segment needs to be prioritized, helping to solve the housing problem for low-income earners, stimulate socio-economic development, speed up population density reduction and expansion of urban areas to suburban areas, and increase sustainability in urban planning.

"The biggest difficulty right now is the land fund for social housing, followed by capital. Currently, investment mainly depends on state capital, so it needs more support from the private sector. Especially, there should be effective policies to simplify legal procedures for businesses involved in social housing," said Giang Huynh.

Comments (0)
  • Read More
Vietnam's Big 4 lender Vietcombank to issue nearly 2.8 bln shares for dividend payment

Vietnam's Big 4 lender Vietcombank to issue nearly 2.8 bln shares for dividend payment

Vietcombank will expand its chartered capital from VND55,891 billion to VND83,557 billion ($3.29 billion) via an issuance of shares to pay dividends, becoming the largest bank in Vietnam by chartered capital.

Banking - Thu, January 16, 2025 | 7:58 pm GMT+7

Indonesia exports $1.5 million worth of steel to New Zealand

Indonesia exports $1.5 million worth of steel to New Zealand

Indonesian Trade Minister Budi Santoso on Wednesday sent off export consignments of welded beam steel, measuring 1,200 metric tons and valued at $1.5 million, to New Zealand, reported national news agency Antara.

Southeast Asia - Thu, January 16, 2025 | 7:17 pm GMT+7

Vietnam to build Ninh Thuan nuclear power plant within 5 years

Vietnam to build Ninh Thuan nuclear power plant within 5 years

Vietnam strives to complete building its Ninh Thuan nuclear power plant in five years (by 2030), towards the 100th anniversary of the Communist Party of Vietnam (1930-2030).

Energy - Thu, January 16, 2025 | 5:06 pm GMT+7

Malaysia, UK discuss elevating relations to strategic partnership

Malaysia, UK discuss elevating relations to strategic partnership

Malaysian Prime Minister Datuk Seri Anwar Ibrahim and his UK counterpart Keir Starmer discussed the elevation of bilateral relations to a strategic partnership during their talk in London on Wednesday.

Southeast Asia - Thu, January 16, 2025 | 3:30 pm GMT+7

Thailand’s Central Retail opens $11 mln GO! hypermarket in central Vietnam

Thailand’s Central Retail opens $11 mln GO! hypermarket in central Vietnam

Thailand’s leading retailer Central Retail opened a hypermarket per its GO! model in Vietnam’s south-central province of Ninh Thuan on Wednesday.

Industries - Thu, January 16, 2025 | 3:29 pm GMT+7

Investment Support Fund: A Strategic leap for Vietnam's economic future

Investment Support Fund: A Strategic leap for Vietnam's economic future

The Vietnamese Government's Decree No. 182/2024/ND-CP, which outlines the establishment, management and use of the Investment Support Fund, represents not just policy instruments for attracting investment but also foundations for advancing strategic sectors and elevating the country's position in the global economy, writes Tran Anh Son, tax & legal director, Global Innovation and Investment Incentives (Gi3), Deloitte Vietnam.

Economy - Thu, January 16, 2025 | 2:55 pm GMT+7

Vietnam PM orders appraisal of tax policies to curb property speculation

Vietnam PM orders appraisal of tax policies to curb property speculation

The Ministry of Finance needs to study tax policies to curb property speculation in line with Vietnam’s socio-economic conditions and international practices, Prime Minister Pham Minh Chinh has requested.

Real Estate - Thu, January 16, 2025 | 2:40 pm GMT+7

Vietnam’s budget carrier VietJet can pilot China's Comac aircraft on some routes: Deputy PM

Vietnam’s budget carrier VietJet can pilot China's Comac aircraft on some routes: Deputy PM

China’s state-owned aerospace manufacturer Comac and Vietnam’s budget airline VietJet should collaborate with a Chinese airline having Comac aircraft to pilot Comac aircraft on some of VietJet routes, says Vietnamese Deputy Prime Minister Tran Hong Ha.

Companies - Thu, January 16, 2025 | 12:26 pm GMT+7

Offshore wind power investors can sell entire projects in Vietnam: draft decree

Offshore wind power investors can sell entire projects in Vietnam: draft decree

A draft decree on offshore wind power being compiled by Vietnam’s Ministry of Industry and Trade will facilitate investors to sell their projects or stakes.

Energy - Thu, January 16, 2025 | 11:27 am GMT+7

Build your own sales channels if e-commerce competition too harsh: NextTech exec 

Build your own sales channels if e-commerce competition too harsh: NextTech exec 

If e-commerce competition is too harsh, Vietnamese businesses should develop their own sales channels and customer databases, says Nguyen Hoa Binh, founder and chairman of NextTech Group, a leading technology startup in Vietnam.

Economy - Thu, January 16, 2025 | 9:05 am GMT+7

Indonesia moves to secure domestic pharmaceutical independence

Indonesia moves to secure domestic pharmaceutical independence

Indonesia's Health Ministry is working to achieve domestic pharmaceutical independence through research and development, production, and market guarantees.

Southeast Asia - Thu, January 16, 2025 | 8:09 am GMT+7

Malaysia cooperates with UAE in AI development, digital transformation

Malaysia cooperates with UAE in AI development, digital transformation

Malaysian Prime Minister Anwar Ibrahim has said that the country must embark on digital transformation within its economic and financial sectors, prioritizing areas such as blockchain and cryptocurrency to remain at the forefront of the digital age.

Southeast Asia - Wed, January 15, 2025 | 11:00 pm GMT+7

Thai billionaire seeks to increase stake in Vietnam dairy gaint Vinamilk

Thai billionaire seeks to increase stake in Vietnam dairy gaint Vinamilk

F&N Dairy Investments Pte. Ltd - an entity associated with Thai billionaire Charoen Sirivadhanabhakdi - has registered to purchase nearly 20.9 million shares of Vietnamese dairy giant Vinamilk (HoSE: VNM).

Companies - Wed, January 15, 2025 | 10:54 pm GMT+7

Vietnam PM leaves for official visits to Poland, Czech, WEF meeting

Vietnam PM leaves for official visits to Poland, Czech, WEF meeting

Prime Minister Pham Minh Chinh departed Hanoi on Wednesday afternoon for official visits to Poland and the Czech Republic, attendance at the 55th World Economic Forum (WEF) Annual Meeting in Davos, and bilateral meetings in Switzerland.

Politics - Wed, January 15, 2025 | 10:31 pm GMT+7

Malaysia’s manufacturing sector sees positive signs in 2025

Malaysia’s manufacturing sector sees positive signs in 2025

Malaysia’s manufacturing sector is forecast to recover well in 2025 as global trade dynamics and geopolitical shifts influence market trends.

Southeast Asia - Wed, January 15, 2025 | 10:06 pm GMT+7

Thailand posts record investment last year

Thailand posts record investment last year

Thailand saw record investment figures for 2024, with applications exceeding THB1.13 trillion ($32.5 billion), the highest in the past decade, according to the country’s Board of Investment (BOI).

Southeast Asia - Wed, January 15, 2025 | 10:05 pm GMT+7