Does Vietnam have an affordable housing crisis?
Does Vietnam have an affordable housing crisis?
Demand is not being met
Vietnam is getting exceptionally short shrift on affordable housing, with the Southeast Asian country now ranking as one of the least affordable markets in the world.
The markets in Hanoi and Ho Chi Minh City have been inordinately focused on the high-grade segment, i.e. residential properties priced at VND40 million (USD1,750) per square metre, according to Nguyễn Trần Nam, president of the Việt Nam Real Estate Association .
Over 80 percent of market demand is pinned on homes priced at VNĐ20 million per square metre, but such properties are “difficult to find,” Nam told Viet Nam News (VNS).
Demand for affordable housing has topped to 10 million square metres to date, DTiNews reported. Yet existing housing stock has only met three million square metres of this demand.
More: This has been the world’s least affordable city for seven years in a row
Vietnam now comes fourth in a list of countries with the highest property-price-to-income ratio in the world, VNS reported, citing data from Numbeo’s 2017 Property Prices Index. With a property-price-to-income ratio of 37.15, Hanoi has been rated as the third least affordable urban market in the world.
Nguyễn Văn Đực, deputy director of Đất Lành Land, warned last year that housing affordability in Vietnam could snowball into “a crisis.”
Another area of concern is the gloomy prospect of land planning in the country, with vertical developments not keeping up with the booming population, especially in urban areas. “High-rise buildings are essential to urban areas. The important thing is planning,” Nam said.
Read next: The ultimate guide to SE Asian real estate in 2016
Source: Property Report