Construction of a property project that has been stalled for years in HCM City’s downtown District 1. HCM City housing is among the least affordable in the Asia Pacific region. VNS Photo Bồ Xuân Hiệp

HCM CITY — HCM City housing is among the least affordable in the Asia Pacific region with a median home price representing 32.5 times the median annual household income, said a report by Urban Land Institute (ULI).

According to the 2023 Asia Pacific Home Attainability Index, HCM City is the second least affordable in the region with the highest median home price in Việt Nam at $296,000 (compared with $214,000 in Đà Nẵng and $182,000 in Hà Nội).

Đà Nẵng housing is the fourth least affordable with a median home price at 26.7 times the median annual household income.

Although HCM City has a slightly larger population than Hà Nội, about 35 per cent less new housing has been completed in the city since 2010 than in Hà Nội, the report said.

In addition to the relatively limited new supply of housing, the larger unit size in HCM City contributes to its higher median home price. It has a median home size of 83 sqm versus 65 sqm for Hà Nội, it said.

These two factors explain the significantly higher ratio of median home price to median annual household income of 32.5 for HCM City compared with 18.3 for Hà Nội, it added.

Many home buyers in HCM City are speculative investors who own multiple units, further pushing up prices, according to the report.

Shenzhen in mainland China is the lowest in terms of home attainability with the highest median home prices at 35 times median household income, it noted. 

“Homeownership is considered unaffordable when the ratio of the median home price to median annual household income exceeds five,” according to the report.

By this standard, only Singapore’s Housing Development Board (HDB) units and apartment units in Australia’s Melbourne and Brisbane are considered affordable. 

According to the report, homeownership is ‘severely challenged’ in HCM City and Đà Nẵng (Việt Nam); Shenzhen (mainland China); Hong Kong (China); Manila and Cebu (the Philippines) with median home prices at around 20 to 35 times the median household income. 

No longer the most expensive in Asia Pacific, Hong Kong’s home price ranks second, behind Singapore whose median price is $1.2 million. 

However, Singapore housing is ‘deemed most attainable with the median price of units at 4.7 times the median household income’, the report said.

Singapore also has the highest homeownership rate at nearly 90 per cent, thanks to the government’s consistent affordable housing policy. 

Compared to home ownership, home rentals are deemed more attainable with monthly rent for most cities at below 30 per cent of median household income with cities in Japan and South Korea having the lowest ratio of monthly rent to income.

The report surveyed a total of 45 cities in nine countries in the Asia Pacific region with a combined population of 3.5 billion or 45 per cent of the world’s population.

The key findings are based on analysis of data, relevant publications and interviews conducted with housing experts in the region, among others. — VNS