Foreigners surprised by Vietnamese parents helping children buy houses

January 11, 2024 | 05:00 pm PT
Foreigners surprised by Vietnamese parents helping children buy houses
Young families can buy house early with financial help from their parents. Illustration photo by Freepik
My American friends are astonished that some Vietnamese receive handouts from their parents to buy a house, while youth in the West have to fend for themselves.

In Vietnam, people often calculate ratio of house prices to income to determine the number of years needed to afford a house and assume that young people cannot afford it due to the unreasonably high real estate prices.

However, this perspective may not fully capture the situation as it is a tradition for Vietnamese parents to contribute partially or fully to their children's first house purchase after marriage.

This makes purchasing a home in Vietnam significantly easier compared to European and American countries.

I see many office workers with only an income of VND10-15 million (US$409-613) per month, but when they get older, when their children start their own families, they still give them billions to buy houses.

In some cases, parents sell their houses and move to a smaller house or a cheaper location to save money for their children's houses.

With financial support from both families, couples usually only need to focus on the remaining amount to buy a house.

Hence, it is not uncommon for young couples in their 30s to own houses in Ho Chi Minh City or Hanoi without mortgages, largely because of this tradition.

My American friends are very surprised by this as their culture usually promotes spending your own money within your lifetime, and it is rare for parents to save or live modestly, let alone sell their own house, to help their children buy one.

As a result, most young Westerners have to be independent in this regard.

American parents often spend their lives paying off their mortgages and debts then use the remainder for personal enjoyment, leaving little for inheritance. Even if there is a substantial inheritance, the next generation tends to spend it rather than save for their descendants.

In Vietnam, the rate of home ownership is as high as 90% of the population, whereas it is 50-66% in Europe and the U.S.

In major cities across Europe, America, Australia, Japan, South Korea, and other regions, the majority of people typically cannot afford to buy houses.

In all countries, housing prices in large cities are exorbitantly high, making it unfeasible for most people to purchase homes. It is unrealistic to gather eight to ten million people in a single city with a continuously increasing population each year and still expect housing to be affordable and accessible for everyone.

In developed nations, especially in densely populated major cities, $1 million can only buy a small apartment of a few dozen square meters or a townhouse that is compact and possibly in complex and less secure areas.

In Southeast Asia, the situation is slightly better, but still, the average house price in Bangkok, Thailand, stands at $400,000.

This is much higher than the average price in the entire U.S. despite the latter country’s GDP per capita being 15 times that of Thailand’s.

Similarly, the amount of money needed to buy a house in Jakarta, Indonesia, could buy three average houses in the U.S. even though Indonesia's per capita income is only about 1/20 that of the U.S.

In large American cities like New York or San Francisco, having a livable income is already considered fortunate while buying a house remains a distant dream for many.

Even a lifetime may not be enough to afford a house, let alone 35-40 years.

I believe the issue is not solely about income but also about population density.

Vietnam's population ranks among the highest globally, with nearly 20 million people concentrated in its two largest cities, resulting in persistent overcrowding.

To address the housing issue in Hanoi and HCMC, I believe the only solution is for the population to spread out to the suburbs.

People should also weigh appropriate alternatives for themselves instead of insisting on living in the city center.

Those who do not have a high income should consider moving back to their hometowns or medium and small cities, where living conditions are more comfortable.

Persistently aiming for life in big cities, known for their intense competition and high living costs, then lamenting about unaffordable housing is not a practical strategy.

What is your viewpoint on this matter?

Reader Le Tung

*This opinion was translated into English by AI. Readers’ views are personal and do not necessarily match VnExpress’ viewpoints.

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