A luxury apartment development in Thủ Đức City in HCM City. The city is set to enhance inspections and regulate real estate activities. — VNS Photo Bồ Xuân Hiệp

HCM CITY — HCM City will enhance inspections of real estate activities, particularly in areas showing abnormal price increases in response to a Government directive to combat price manipulation and speculation.

Phan Văn Mãi, chairman of the People’s Committee, has called for increased oversight of real estate investors, trading platforms, and brokers to promptly address violations.

Mãi has proposed stricter controls on real estate broker licences and the operations of real estate trading floors.

“Projects with abnormal price increases will undergo reviews for legal compliance and transparency,” he noted.

The Department of Natural Resources and Environment has been directed to take firm action against the exploitation of land use rights auctions.

The HCM City Police will investigate violations related to land-use auctions and misleading market information.

Mãi has also urged district leaders, including those in Thủ Đức City, to ensure transparency regarding eligible real estate projects to prevent market distortion.

Prime Minister Phạm Minh Chính recently said some areas reported real estate prices exceeding residents’ financial capacities and called for timely actions to address manipulation and price inflation.

According to a report by the Department of Construction, only 1,611 high-end commercial housing products were eligible for market release last year, with average prices reaching VNĐ9.39 billion per unit.

The focus on high-end housing has neglected the affordable segment, leading to a significant lack of lower-priced options.

The HCM City Real Estate Association (HoREA) said there was an oversupply of luxury homes and a severe shortage of affordable housing.

The average housing price has exceeded VNĐ60 million per square metre, which is beyond the reach of most residents.

According to a recent report by real estate consultant agency CBRE, HCM City and Hà Nội rank among Asia’s least affordable cities for homebuyers.

In Hà Nội, the average apartment price is $2,600 per square metre, with an average annual income of $6,300, creating a troubling income-to-housing price ratio of 2.4.

HCM City’s average apartment price is $2,800 per square metre, with an average income of $7,500, resulting in a ratio of 2.7.

Residents in Hà Nội would need to work 50 years to buy a house and 23 years for an apartment. Meanwhile in HCM City, it’s 53 years for a house and 24 years for an apartment.

The International Monetary Fund considers housing affordable if it costs no more than 30 years of income.

While young professionals in developed nations typically take 10 to 15 years to buy a home, in Việt Nam, this extends to 23 to 25 years.

Current apartment prices range from VNĐ40–70 million ($1,600–$2,800) per square metre, meaning a 60-square-metre apartment costs between VNĐ2.5–3.5 billion.

Even the top 20 per cent of earners struggle with homeownership, according to a recent Ministry of Construction report indicating a 40-50 per cent price increase in Hà Nội and 20-30 per cent in HCM City last year.

The report also revealed most residents could only afford half the cost of their desired properties.

Nguyễn Văn Đính, chairman of Vietnam Association of Realtors (VARS), said even halving housing prices would still leave many middle- and low-income earners unable to buy homes.

Tightened government regulations since 2018 had limited housing supply, while demand had grown, driving prices beyond income growth, he added. — VNS