Since 2018, Ms. Hoang Le Trang's family (Hung Yen province) has set a target of saving 120 million VND per year. It is expected that after 7 years, along with additional loans from banks, Ms. Trang can buy an apartment in Hanoi.
However, the current price of apartments has increased more than 4 times compared to 7 years ago, the savings of Ms. Trang's family are less than 1/5 of the value of the apartment planned to buy. The plan to buy a house must be put on hold, Ms. Trang's dream of settling down in Hanoi is unknown when it will be able to be realized.
"7 years ago, a 65m2 apartment in Hoang Mai ward, Hanoi cost about 1.8 billion VND. I calculate with 1/3 of my accumulated monthly income, after 7 years I have saved nearly half of the apartment value, then borrowed from the bank to buy.
But now, the price of that apartment has increased to more than 4 billion VND, beyond the family's financial plan. The additional loan amount is too large, so I don't dare to buy a house anymore," Ms. Trang shared.
In fact, commercial apartment prices have increased 4 to 5 times in the past 5 years. Currently, in Hanoi's inner city, there are almost no commercial apartment projects priced under 70 million VND/m2. The price of over 100 million VND/m2 of apartments is currently considered normal. High-end projects have much higher prices.
Current apartment prices not only exceed the affordability of low-income people but are also out of reach for those in the upper middle-income group. Many people with an income of 40-50 million VND/month do not dare to buy when the additional loan is too large.
According to experts in the real estate sector, most people will set a goal of saving 1/3 of their income to buy a house and the ideal time to repay all home loans is less than 20 years.
However, at present, the rate of real estate price increase has been many times higher than the income increase of the majority of people. This means that the accumulation time and repayment time are long, and the great financial risks make many people not dare to buy a house.
Analyzing this issue, Mr. Le Hoang Chau - Chairman of the Ho Chi Minh City Real Estate Association - said that for apartment buildings, land costs account for about 15%, construction costs account for about 50% of the cost. In addition, there are interest expenses, administrative procedures, and project legal procedures.
"Land use fees and land rents have increased. The prices of construction materials such as steel, sand, and bricks have all recorded an increase. This has forced investors to recalculate the output product price. In addition, there is also a situation of hoarding and price inflation by speculators in the secondary market, causing housing prices to be pushed up" - Mr. Le Hoang Chau commented.
Recently, many social housing projects in Hanoi and some major cities have been implemented, when the supply of social housing is abundant with prices suitable for the income of the majority of workers, many people expect commercial housing projects to have to adjust their business strategies.
