HCMC workers need 34 years’ income to buy a home

This marks an increase from last year’s 32.4 years and is the fifth highest figure globally. Numbeo calculates the figure, called the house price to income ratio (HPR), using the average price for a 90-square-meter apartment and median household income.

The ratios are 24.7 for Hanoi and 25-26 across Vietnam, up from 20.6 and 23.7 and far above the global average of 15.

The ratio is recommended by the World Bank and the United Nations to measure housing affordability.

A report by property consultancy CBRE shows that Hanoi and HCMC are among the Asian cities where people find it difficult to afford homes based on their current income.

It said the average apartment price in HCMC is currently close to US$3,000 per square meter while the average per capita income is $7,500 per year.

Given this disparity, workers in the city may have even less access to housing than their counterparts in Singapore.

A housing demand survey published late last year by HCMC’s Institute for Development Studies found that an average family only has enough money to pay for 53% of the house or land it desires to buy in the next two years.

Dr. Can Van Luc, chief economist at state-owned lender BIDV, believes Vietnam’s rising housing prices are to blame for its high HPR.

A shortage of supply, rising costs and various unexpected expenses have pushed up housing prices while income growth has not kept pace, he said.

An expert from One Mount Group, the parent company of property trading platform OneHousing, added that HCMC’s lands are almost fully utilized, leaving little room for new housing projects, while lengthy legal and approval procedures have been delaying the launch of new developments.

A report from the Department of Construction shows that around 3,800 apartments went on sale last year at an average price of VND9.4 billion ($361,200).

The Ho Chi Minh City Real Estate Association said units priced below VND3 billion are difficult to find and those under VND2 billion even more so.

Experts forecast that the gap between housing prices and income in HCMC would widen as land use fees rise under the new land price framework and construction costs continue to climb.