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Houses unaffordable for majority of Vietnamese
CBRE, a commercial real estate service provider, has said that 80% of Vietnamese people who have a real demand for accommodations do not have enough money to purchase houses.
Homes out of reach
80% of Vietnamese people who have a real demand for accommodations do not have enough money to purchase houses.
According to CBRE, most of those who have a real demand for accommodations now are young families, or those who have emigrated from the countryside to cities. With their current income levels, they either have to ask for support from parents or seek loans from banks.
According to Jone Lang La Salle, a real estate consultancy company, if noting that the average income is $1,800/capita/year, it will take a 4-member family 15 years to save up VND600-800mil to buy a house.
The young now tends to purchase apartments, but apartments prove to be unaffordable for many of them. An old 60-70 sq m apartment at Linh Dam apartment block is priced at VND1.3-1.5bil.
Flats in residential quarters of separated houses in suburban areas of cities prove to be the optimum choice for medium-income earners. An old flat, 60 sq m at Nghia Tan residential quarter, is priced at VND950 sq m.
“Everything in Hanoi, from the land price, construction cost, opportunity cost and the interest rate per sq m all are well higher than the current average income level,” said Nguyen Dang Quang, Senior Manager of Jone Lang La Salle.
It is now very difficult to borrow money from banks to pay for houses. Banks now offer loan packages which allow borrowers to pay principal and interest after tens of years. However, the high interest rates prove to be a heavy burden on families which have the incomes of VND10mil a month.
State support, when?
The state has promised to provide low-cost accommodations for state employees. However, many low-cost house projects remain on paper. Investors are not interested as the projects are not money-makers.
In fact, there exist accommodation development funds in HCM City and Hanoi. However, the number of people who can receive support from the funds proves to be too small compared to the big number of people who really need accommodations.
The HCM City Accommodation Development Fund, for example, has lent VND20bil to 100 low-income employees in the last two years. Each of the loans from the fund is VND300mil, while the value of an apartment is VND500-700mil at least. This means that even when receiving loans from the fund, people still have to borrow money from banks to purchase houses.
VNN
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