Apartment prices continue to rise far beyond workers' incomes
- 3
- Business
- 12:07 07/09/2024
DNHN - Apartment prices continue to rise sharply, increasingly out of reach for workers' incomes. This gap not only creates significant financial pressure but also makes homeownership increasingly difficult for the majority of people.
In recent times, apartment prices have continued to rise, creating a growing gap compared to workers' incomes. Many people feel helpless as housing prices in major cities far exceed their financial capabilities. This disparity makes buying a home a distant goal for most workers, causing great financial pressure.
The increase in apartment prices is primarily due to high demand, limited supply, and rising construction costs. While many people desire homeownership, new construction permits face difficulties, and material costs are also rising. This drives apartment prices even higher, making demand difficult to meet in a timely manner.
Furthermore, the gap between apartment prices and workers' incomes leads to challenges in home buying. For many people, buying a home not only poses a financial challenge but also involves long-term debt burdens. This affects their financial stability and quality of life.
To address this situation, policies and solutions are needed from both the government and businesses. The government needs to reform the construction permit process and control speculation, while real estate businesses should focus on developing more affordable housing projects. This is the only way to alleviate financial pressure and help workers access housing.
According to the Vietnam Economic Situation Report by the World Bank (WB), the average real monthly income of workers in Vietnam reached only 7.45 million VND in June 2024, with a modest growth rate of 7% compared to the previous year (at current prices). Real income growth has not significantly increased since 2022 and is lower than in the pre-Covid-19 period.
Based on data from the General Statistics Office, the average per capita income in 2023 reached 4.96 million VND per month, an increase of 6.2% compared to 2022. Meanwhile, the average income in Hanoi was 6.869 million VND per month, up 6.5% from the previous year, ranking second in the country only after Binh Duong. However, this growth still does not keep pace with the rise in real estate prices.
Although real incomes have not improved significantly, apartment prices have skyrocketed. According to a report by the Ministry of Construction, the price of apartments in the second quarter of 2024 increased by an average of about 25% compared to the same period last year. The price increase occurred not only in new projects but also in older, previously used apartments, reflecting the "rapid" increase in housing prices.
Commenting on this issue, Mrs. Nguyen Hoai An, Senior Director of CBRE Vietnam, provided important data on the real estate market in the second quarter of 2024. According to Mrs. An, primary apartment prices have risen to nearly 65 million VND per square meter, representing a significant increase of up to 30% compared to the same period last year. This sharp rise reflects a worrying trend in the real estate market, where housing prices are rapidly increasing while workers' incomes are not improving correspondingly.
In addition to the impressive rise in the primary market, Mrs. Nguyen Hoai An also emphasized that apartment prices in the secondary market have increased by up to 22% compared to 2023. This shows that not only new projects but even older, used apartments are seeing significant price increases. This price surge not only affects consumers' purchasing power but also raises concerns about the sustainability of the real estate market.
Despite the continued rise in apartment prices, workers' incomes have not improved significantly. The growing gap between housing prices and incomes makes it difficult for many people to afford a home. Mrs. Nguyen Hoai An pointed out that in the context of incomes not increasing in line with real estate prices, buying an apartment is becoming increasingly difficult, creating an unbridgeable gap in the housing market.
The situation of apartment prices continuing to soar sharply, far exceeding workers' income growth, is creating a growing gap between people's purchasing power and the reality of the real estate market. As apartment prices rise dramatically while incomes remain modest, workers face increasing financial pressure in achieving homeownership.
This situation not only exacerbates inequality in housing access but also poses a major challenge for policymakers in balancing the real estate market with people's ability to pay. To address this issue, effective adjustment measures are needed to ensure sustainable and equitable development in the housing market.
Nhan Ha
Related news
#Real estate
More than 1,000 new real estate businesses established in Ho Chi Minh City, transactions grow
In the first nine months of 2024, Ho Chi Minh City's real estate market witnessed the establishment of over 1,000 new businesses and recorded 1,600 property transactions, signaling a positive recovery trend.
Pilot project for commercial housing to expand land use rights
The National Assembly Standing Committee has submitted a pilot project on commercial housing through land use rights agreements for National Assembly consideration, aiming to unlock resources.
Assoc. Prof. Dr. Tran Kim Chung: The 1987 Land Law laid the foundation for the real estate market
Assoc. Prof. Dr. Tran Kim Chung, former Deputy Director of the Central Institute for Economic Management, states that the 1987 Land Law laid the groundwork for the development of the real estate market.
Draft resolution on commercial housing: A new opportunity for the real estate market
Amid the challenges facing Vietnam’s real estate market, the addition of a Draft Resolution piloting commercial housing projects brings renewed hope to citizens and promises to boost economic development.
Social housing loan package increased to VND 145 trillion
The social housing loan package, originally valued at VND 120 trillion, has been raised to VND 145 trillion with the participation of nine banks, drawing attention from businesses and consumers.
What should real estate businesses do during a recession cycle?
When the real estate sector enters a recession cycle, businesses in the industry face significant challenges.
Đọc thêm Business
Korean businesses wants to import agricultural and seafood products from Ca Mau
Korean businesses have expressed a desire to import agricultural and seafood products from Vietnam, while also researching and developing cosmetics and pharmaceuticals from the unique ingredients of Ca Mau.
An Giang rolls out the red carpet to attract investors with 60 promising projects.
The conference introducing the potential and unique products of An Giang province in Ho Chi Minh City is not just a simple investment promotion event, but also a bridge connecting businesses and investors with a land full of development potential.
Vietnam promotes a strategy to penetrate the Middle Eastern Halal market
Vietnam is boosting its Halal exports by leveraging its agricultural strengths and upgrading its certification system to meet the growing global demand, particularly in Middle Eastern markets.
Banks inject capital to support export businesses accelerating at the end of 2024
At the end of 2024, export businesses are ramping up production, increasing orders, and receiving preferential credit support from banks to maintain sustainable growth.
Why are Vietnamese startups not focusing on the domestic market?
The reality of Vietnamese startups overlooking the domestic market is one of the notable issues in the current context of socio-economic development.
QuickPack Group (Germany) invests Eur30 million in Dong Tam Group'S Southeast ASIA Long An Industrial Park in Long An (Vietnam)
On November 18, 2024, in Cologne, Germany, Dong Tam Group (Vietnam) officially signed a Memorandum of Understanding (MOU) for an investment cooperation with QuickPack Group (Germany).
International trade connection program in Ca Mau 2024
The program aims to promote trade and enhance the image of Ca Mau province to international partners, while also fostering economic cooperation and the development of high-tech agriculture in the region.
Gold peaks, stocks languish: Experts identify opportunities for investors
Gold prices have peaked due to political and monetary factors, but face the risk of adjustment. Stocks remain difficult to recover due to weak liquidity and ongoing foreign net sales.
General Secretary Tô Lâm sounded the alarm on preventing and combating waste
General Secretary Tô Lâm has addressed visible waste and identified invisible forms of waste, delivering a powerful message with profound awakening implications...
Electricity price hike and the long-term energy dilemma
With EVN's third price hike since 2023, rising electricity costs burden households and industries. Experts warn that sustained losses threaten future power projects, urging reforms to boost investment and ensure energy security.