Vietnam's housing market is facing pressure with soaring prices, making Ho Chi Minh City and Hanoi, the country's two business and financial hubs, among Asia's least affordable cities for homebuyers, according to the CBRE report.
According to the recently published report examining the gap between housing costs and income levels in major Asian cities, the two Vietnamese cities have even surpassed Singapore in the gap between housing prices and average income.
In Hanoi, the average price for an apartment is about 2,600 USD per sq.m, while the typical annual income stands at 6,300 USD, which results in a concerning income-to-housing price ratio of 2.4. In HCM City, the average apartment price is 2,800 USD per sq.me, with an average annual income of 7,500 USD, yielding a ratio of 2.7.
A higher ratio typically indicates improved affordability, while a lower ratio suggests a lack of affordability. The findings from CBRE revealed that acquiring a home in HCM City and Hanoi has become more challenging than in Singapore.
Although housing prices in Vietnam are comparable to those in other Asian countries, the average income remains significantly lower, resulting in these concerning affordability ratios.
The Vietnam Association of Real Estate Brokers (VARS) estimated that current prices for apartments range from 40–70 million VND (1,600–2,800 USD) per sq.m. Purchasing a 60sq.m apartment in either city may cost 2.5–3.5 billion VND. Individuals within the top 20 per cent of income earners in Vietnam (earning 13–20 million VND per month) face huge challenges in securing homeownership. In contrast, lower-income groups face nearly insurmountable barriers.
A recent report from the Ministry of Construction showed apartment prices surged by 40–50 per cent in Hanoi and 20-30 per cent in HCM City last year compared to 2023. Factors including new land pricing frameworks, escalating land costs, labour expenses, and construction and logistics fees are all expected to contribute to ongoing price increases. Analysts recommended that in the long term, Vietnam should invest more in infrastructure and promote population shifts to suburban areas to mitigate the rising costs.
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