According to CB Richard Ellis Vietnam (CBRE), a real estate company, housing prices are often as much as 25 times the yearly average income of a person in Vietnam. Nevertheless, most Vietnamese people in general and residents of Ho Chi Minh City have their own houses. So, what is the way they can afford to own a house?
Saigon Giai Phong Newspaper had a talk on this issue with Huynh The Du, a Fulbright Scholar and Lecturer at the University of Economics in HCMC, who is currently doing a PHD on urban design at Harvard University.
Du said that in the past ten years of the 20th century and ten first years of the 21st century, because of the huge economic breakthrough, population in HCMC doubled. As a result, the City infrastructure became overloaded and to make adjustments, many housing projects sprang up.
In other countries, immigrants to any big city immediately purchase a house or buy land to build their own house. If the process takes place without government intervention, the population becomes divided as rich and poor in about equal measure.
However, this situation did not happen in HCMC thanks to government support on creating an essential infrastructure and issuing legal documents to immigrants.
In addition to a natural population increase, the City has around 300,000 immigrants coming from all corners of the country every year; whereas housing developers can meet only one-third of the demand, resulting in people seeking to make a shelter of their own.
Average income per head as per a survey in 2010 is VND1-6.5 million a month. On an average, a house contains five people with monthly income from VND5-32 million. Assuming that people spend a maximum of 30 percent of their income on purchasing a house, they will pay from VND186-1.1 billion during the next 30 years for a house.
According to Fulbright lecturer Le Nguyen Tran, expenditure on a house in the legal market in HCMC’s precincts in 2011 was VND9.7 million per square meter and in the black market at VND4 million per square meter.
With such income, people can purchase a 19-25 square meter house or a smaller house in the legal market against 47-134 a square meter house in the black market. With meager incomes, most residents in HCMC seek a house via the black market.
Therefore, the role of the black realty market in the present context needs to be studied. However, this does not mean that the government will allow construction of illegal houses, but urban planning should have participation of people and control of the government in developing the City’s skyline.
In future, when more and more people flood the City for work and study, planning projects must be well publicized to the public.
