On December 3, at the Vietnam Real Estate Summit (VRES) 2024, experts analyzed "The 30-year journey of the Vietnamese real estate market" and "Overview of the real estate market - Looking to the world".
2024 will see a high level of interest in issues of selling prices and difficulties in owning real estate. Data from Global Property Guide shows that real estate prices in Vietnam are growing rapidly compared to the world.
Vietnam's 5-year price growth reached 59%, higher than many other countries such as the US (54%), Australia (49%), Japan (41%), Singapore (37%)... The high price increase has caused real estate rental yields in Vietnam to be only 4%, while many other countries such as the Philippines, Malaysia, Thailand, Indonesia, the UK, Australia, and the US have real estate rental yields ranging from 5% - 7%.
According to Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn, real estate is considered the investment channel with the best yield in Vietnam in the past 10 years with the profit margin of apartments reaching 197% and land reaching 137% in the fourth quarter of 2024 compared to the first quarter of 2015.
Vietnam’s population and urbanization rate present many opportunities for real estate demand growth. The trend of smaller families also drives demand for property for the next generation to inherit and the journey of home ownership for young people. In addition, culturally, Vietnamese people have a strong desire to own real estate in their lifetime.
According to Mr. Nguyen Quoc Anh, comparing the average salary and house prices of the past and present, it can be seen that not only Gen Z today but also young Vietnamese people, regardless of the era, face many difficulties in buying a house on their own.
In 2004, it took an individual of the 7x generation about 31.3 years of income to buy an apartment (60m2) worth 0.6 billion VND, under the condition of a mobilized interest rate of 7.4%. After 10 years, the number of years of income for an individual of the 8x generation to buy the above apartment is 22.7 years. The apartment price has increased to 1.5 billion VND while the mobilized interest rate has decreased to 6%.
By 2024, a 9x individual will need 25.8 years of income to buy the above apartment (priced at 3 billion VND) under the condition of a mobilized interest rate of 4.5%. Although the number of years of income and interest rates have decreased over time, in general, young people of all generations still need to make efforts for a long time to be able to own a house.
However, Vietnamese people in particular and Asians in general still have high expectations about owning real estate in their lifetime, with common reasons including high and stable yields, underdeveloped financial markets, social recognition and property - a place to live for the family.
Notably, Vietnam is among the countries with the highest real estate ownership rate in the world at 90%, higher than some countries in Southeast Asia such as Singapore (88%), Indonesia (84%) and higher than the US (66%), Australia (66%)...
