HPR (house price to income ratio) is calculated by dividing the median home price by the median annual household income. The HPR of the Philippines, Thailand and Indonesia in 2024 is 27, 26.5 and 18.9, respectively. Vietnam’s HPR in 2019 was 19.7.

The Vietnam Association of Realtors (VARS) reported that the index of apartment prices in Hanoi rose by 38 percent in 2023 compared with 2019.

In the last few years, apartment prices saw two-digit growth rates annually. In 2023 alone, apartment prices in Hanoi increased by 16 percent. The figure in HCM City also began increasing again in the third quarter 2023.

In Hanoi, the prices of new and used apartments have increased sharply. Even the apartments located far from the city center are offered at VND60-70 million per sq m.

At Lumi Hanoi project (in Tay Mo ward of Nam Tu Liem district), which has just kicked off and opened to take reservations, apartments are offered at VND66 million per sq m. If counting VAT, the prices would be VND72 million per sq m. As such, a 2-bedroom apartment with total area of 74 sq m is priced at VND5.3 billion.

Also in Tay Mo ward, the apartments at Masteri West Heights project are offered at VND3.6 billion (59 sq m), VND3.9 billion (62 sq m), or VND61-62 million per sq m.

Do Thu Hang from Savills Hanoi noted that apartment prices in Hanoi are very high, about VND58 million per sq m on average in the primary market.

Hang attributes the high prices to increased construction costs and developed infrastructure. In addition, legal problems over the last few years caused shortages short.

The total supply in 2023 was 10,000 products, a 10-year low.

Experts said in order to force the prices down, it is necessary to increase the supply. Once more products are marketed, especially social housing products, the average selling prices will decrease sharply.

Prime Minister Pham Minh Chinh earlier this year requested the Ministry of Construction to instruct real estate firms to restructure their products, and  lower prices and pay attention to housing for low income earners.

Hong Khanh