Minimum income needed to afford average-priced house in Hanoi 2-10 times higher than residents’ average income
Minimum income needed to afford average-priced house in Hanoi 2-10 times higher than residents’ average income
The minimum income needed to buy an average-priced house in Hanoi is two to 10 times higher than the actual average income of local households, according to data from the Vietnam Association of Real Estate Brokers (VARS).
Apartment prices in Hanoi have nearly doubled, while the income of residents has increased insignificantly over the past few years. Photo: Nam Tran / Tuoi Tre |
VARS noted that with current house prices, many people cannot earn enough money to buy a house in the capital city.
In its latest report, the association informed that house prices in the capital city have risen dramatically, while residents’ incomes have not improved proportionally, leading to a continuous decline in housing affordability in Hanoi.
According to VARS, people with middle incomes in Hanoi may have to give up their dream of owning a home or look for opportunities in areas with lower housing costs.
The reason is that many people cannot earn enough money to buy a home or afford monthly payments when purchasing a house.
Amid economic difficulties, including the risk of trade wars, many are concerned about income growth prospects.
According to data from the General Statistics Office, the average monthly income of laborers in Hanoi reached VND10.7 million (US$423) in the third quarter of 2024.
VARS assumed that a family of four, with two people in the working age has a total income of around VND21.4 million ($846) per month.
With the average apartment price at about VND70 million ($2,767) per square meter in 2024, people need a monthly income of VND45-210 million ($1,779-8,302) each to buy an apartment in Hanoi, depending on the property price in different areas.
The significant disparity between actual average incomes and housing prices makes owning a home in Hanoi a challenge for most middle-income or upper-middle-income families, with many unable to afford housing.
In particular, house prices have been more accessible in suburban Ha Dong, Bac Tu Liem, and Long Bien Districts, but are still affordable by individuals or families with monthly incomes of VND40-60 million ($1,581-2,372) each.
If buyers can borrow bank loans equal to 70 percent of the house cost at an average interest rate of eight percent per year for 20 years and their monthly installment payments do not exceed 40 percent of their income, the minimum income needed to buy an average-priced house in Ha Dong, Long Bien, Nam Tu Liem, Bac Tu Liem, and Gia Lam District is two to three times higher than the actual income.
The disparity is 3.7 to eight times in central districts such as Hoan Kiem, Ba Dinh, Hai Ba Trung, Dong Da, and Tay Ho, and three to 3.5 times in Cau Giay and Thanh Xuan Districts.
According to VARS, buying a home in Ha Dong, Long Bien, Nam Tu Liem, Bac Tu Liem, and Gia Lam District is more feasible for middle-income families in Hanoi.
However, middle-income earners’ housing affordability is increasingly difficult as house prices continue to rise, with new apartment projects put up for sale at VND60 million ($2,372) per square meter at the minimum.
