Over the past 5 years, the Vietnamese real estate market has recorded impressive growth, with the price increase index considered the highest in Southeast Asia. According to the Vietnam Association of Realtors (VARS), the two segments of housing and land have witnessed an increase of 60-70%, surpassing many countries in the region.
This price increase reflects the strong attraction of the market, stemming from economic development, rapid urbanization and increasing housing demand. Large cities such as Hanoi, Ho Chi Minh City or suburban areas such as Bac Ninh, Bac Giang, Hung Yen, etc. have become the focus of cash flow thanks to good profit potential.
However, the decrease in supply due to strict legal regulations for new projects has created great pressure on housing prices. In addition, the trend of investing in land, which is considered a safe asset holding channel, has further promoted strong price increases in this segment.
According to experts, the rapid increase in real estate prices is a sign of the attractiveness of the Vietnamese real estate market, but also a warning of potential risks if there is no strict control. Increasing prices too quickly can create a virtual market, causing instability in the real estate market.
In fact, the high price of houses and land not only makes it difficult for people with average and low incomes to access housing but also increases the risk of speculation. In many areas, land prices are pushed up due to speculative activities and short-term "surfing" instead of real demand.
Commenting on the current housing prices in Vietnam, Dr. Le Xuan Nghia - an economic expert said that according to the recommendation of the International Monetary Fund (IMF), housing prices should not be more than 30 times the income of a worker. If it exceeds this level, signs of a real estate bubble appear. However, in Vietnam, this number is about 60 times.
Sharing the same view, Dr. Can Van Luc, Chief Economist of BIDV Bank, Member of the National Financial and Monetary Policy Advisory Council, shared that a recent survey by an organization specializing in real estate research shows that real estate prices in Vietnam compared to the average income of people, it takes about 23.5 years of income to buy an average-priced house, compared to the world average of 14.5 years.
"Thus, housing prices in Vietnam are almost double the world average, not to mention purchasing power," said the expert. From this reality, Mr. Luc believes that one of the best solutions is to increase supply.
"We have recommended that the Government soon introduce a preferential credit package for social housing. In particular, it is necessary to quickly resolve and remove real estate and land projects that have been stuck, stagnant or abandoned for many years. These projects are initially worth tens of billions of dollars. If cleared, the supply will be extremely large, and investors will also be willing to sell at more attractive prices," Dr. Luc emphasized.
"Regarding real estate prices, the Law on Real Estate Business requires the Government to intervene. If real estate prices increase by 20% in a quarter, the State must intervene. Recently, prices have increased by more than 20%. In the coming time, the Government will continue to intervene to make real estate prices more suitable for both buyers and sellers," said Mr. Luc.
Looking at market developments, it can be seen that the attraction of the Vietnamese real estate market is undeniable. However, for sustainable growth, balancing the interests of investors and the housing needs of the people is still a problem that needs to be solved.
