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A recent report by the Urban Land Institute (ULI) has revealed that housing in Ho Chi Minh City is one of the least affordable in the Asia Pacific region. The study, called the 2023 Asia Pacific Home Attainability Index, highlighted the stark reality of housing affordability in the city.
According to the report, Ho Chi Minh City ranks second in terms of affordability, with the median home price reaching an astounding 32.5 times the median annual household income. The median home price in the city is approximately $296,000, significantly higher than Da Nang's $214,000 and Hanoi's $182,000.
The study also shed light on the housing situation in Da Nang, which ranked fourth in terms of affordability. The median home price in Da Nang stands at 26.7 times the median annual household income.
One of the key factors contributing to the unaffordability of housing in Ho Chi Minh City is the lack of new housing supply. Despite having a slightly larger population than Hanoi, the city has witnessed approximately 35% less new housing construction since 2010 compared to its counterpart.
Furthermore, the report highlighted that larger unit sizes in Ho Chi Minh City also contribute to higher median home prices. The median home size in the city is 83 square meters, compared to 65 square meters in Hanoi.
Speculative investors owning multiple units were identified as another factor driving up prices in Ho Chi Minh City. This trend has further intensified the housing affordability crisis in the city.
The study compared the situation in other regions and found that Shenzhen in mainland China had the lowest home attainability, with median home prices reaching 35 times the median household income.
The report defined homeownership as unaffordable when the ratio of the median home price to the median annual household income exceeds five. By this standard, only Singapore's Housing Development Board (HDB) units and apartment units in Melbourne and Brisbane, Australia, were considered affordable.
In terms of overall home prices, Hong Kong ranked second, trailing behind Singapore, whose median home price reached $1.2 million. However, Singapore was regarded as the most attainable market, with unit prices at 4.7 times the median household income, thanks to the government's consistent affordable housing policy. Singapore also boasted the highest homeownership rate, nearing 90%.
In comparison to homeownership, home rentals were deemed more attainable, with monthly rents in most cities below 30% of the median household income. Cities in Japan and the Republic of Korea had the lowest ratio of monthly rent to income.
The ULI report surveyed a total of 45 cities in nine countries across the Asia Pacific region, representing a combined population of 3.5 billion, which accounts for 45% of the world's population.
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