If you have an income of about 30 million VND/month, how much should you buy a house?

The market is disappearing for apartments under 25 million VND/m2

Recent information about the real estate market, the Ministry of Construction said, the number of projects Newly approved and completed housing developments decreased compared to previous years, leading to quite limited supply to the market. However, house prices tend to increase beyond the financial ability of the majority of people who want to buy for use.

Notable in the recent market like no project affordable apartment segment (price below 25 million VND/m2). The market is mainly mid-end segment (price 25-50 million VND) eligible to mobilize capital and transactions.

Also according to overview report real estate market Hanoi in the fourth quarter of 2023 by Savillsnew apartment supply for at least 10 years. Apartments priced over 4 billion VND account for 42% of the number of apartments sold in 2023, an increase from 3% in 2019. Apartments priced from 2-4 billion VND account for 55% of the market share. Only 3% of apartments are priced under 2 billion VND.

According to the Vietnam Association of Real Estate Brokers (VARS), over the past many years, rapid economic growth and urbanization have increased the demand for housing while supply has continuously decreased and has not shown signs of improvement. The rebound in performance since 2018 has made the supply-demand mismatch increasingly serious.

The supply structure is increasingly leaning towards high-value high-end products for speculative investment purposes. This prolonged phase difference causes housing prices to continuously push up, establishing a new price level that is far beyond the ability of the majority of people to pay.

Not only does it make it difficult for those in need. Buying a house to live in makes it increasingly difficult to access housing with their own income, which also reduces this demand. Especially the younger generation is gradually giving up because “no matter how hard they try, they can’t buy a house” and switching to a lifestyle of enjoyment that prioritizes renting a house.

This unit’s research data shows that the proportion of resources The supply of apartments in the affordable segment (under 25 million VND/m2) out of the total housing supply continues to decline from 30% in 2019 to 7% in 2022 and 6% in 2023.

In the period 2019-2022, the proportion of mid-range apartments (25-50 million VND/m2) also decreased to 54%, 0,460,3427%, respectively, with the supply mainly coming from products priced at 40-50 million VND. VND/m2.

In real housing demand, it always leads the housing demand structure with a proportion of 80%, the remaining 15% is long-term investment demand and 5% is investment demand. muscle. And only about 25% of real housing demand has the financial ability to convert into real demand.

Housing costs account for no more than 30% of total income

In the above context, social housing and affordable housing will be the main strong development trend in the real estate market in the coming period. Because this is a segment derived from the actual needs and abilities of the majority of people.

According to Mr. Nguyen Van Dinh – Chairman of VARS, there is no official concept of affordable housing. However, it is possible to point out some characteristics of this type by comparing with social housing and based on determining the reasonable price of housing.

Social housing Mainly targeting low-income earners and workers in industrial zones who are exempted from land use fees and have access to preferential credit packages exclusively for investors and home borrowers…

Also Affordable housing is commercial housing with moderate prices suitable for the financial capacity of the majority of people, targeting the group of people with average and near-average income levels with a certain level of accumulation.

According to VARS president, a reasonable house price is when each household can balance housing costs and other living expenses within the scope of their income Housing affordability in many countries around the worldAffordable housing is housing where housing costs account for no more than 30% of the household’s total income.

“For a household with income is about 30 million VND/month. 30% of this cost is equivalent to a cumulative amount of about 100 million VND/year, then affordable housing costs about 2-25 billion VND/apartment” Mr. Dinh for example.

According to him, it is currently very difficult to develop apartment projects with prices in the above range, especially in two special urban areas with high housing demand. However, difficult does not mean impossible.