Luxury housing developments in downtown HCM City. Home prices in Việt Nam have soared far beyond the reach of most residents. — VNS Photo Bồ Xuân Hiệp

HCM CITY — Việt Nam’s housing market is heating up to worrying levels as home prices continue to rise far beyond what most people can afford, the Vietnam Association of Realtors (VARS) has warned, urging the government to establish a set of indicators to monitor and issue early warnings of potential risks.

In its latest report, VARS said the housing market is showing signs of instability, with “unsustainable and overheated growth” driven largely by luxury developments and speculative investment, while affordable homes (the segment most in demand) have almost disappeared.

“The government needs to apply the brakes on the sharp increase in housing prices to reduce risks for the economy,” the association said.

According to VARS data, more than 100,000 housing units were launched nationwide in the first nine months of this year, up 22 per cent from the whole of 2024.

In Hà Nội, apartments priced between VNĐ80-200 million (US$3,200-8,000) per square metre made up 42 per cent of total supply, while those between VNĐ50-80 million accounted for about 21 per cent.

In contrast, affordable units, those under VNĐ25 million per square metre, made up just 3 per cent of new supply, and all came from social housing projects.

“This means that commercial affordable housing has almost vanished from the market,” the report said.

VARS noted that the recent surge in home prices has primarily benefited a small group of people who already own multiple properties and have strong financial capacity, allowing them to accumulate more real estate as investment assets.

“Meanwhile, ordinary people are feeling poorer even as the economy grows, because housing costs are increasing much faster than income,” the association said.

Data from the Ministry of Construction show that apartment prices in Hà Nội and HCM City have risen by nearly 6 per cent since the beginning of the year, reaching an average of VNĐ70-80 million per square metre.

Some luxury projects are now selling for over VNĐ150 million per square metre, which is far beyond the reach of most urban households.

By comparison, according to the General Statistics Office, the average monthly income of workers nationwide in the first nine months was only VNĐ8.3 million ($330), and about VNĐ10 million ($400) in urban areas. The youth unemployment rate remains above 10 per cent.

VARS warned that such a disparity between housing prices and income could lead to growing social inequality and instability, as more families are priced out of the housing market.

Recommendations

To address the issue, the association has recommended that the government develop a comprehensive set of criteria to track and issue early warnings on market movements.

These indicators would help authorities identify abnormal trends such as sudden price spikes or drops in liquidity, allowing for timely intervention.

It also called for faster progress in building a national real estate and land database to enhance transparency, reduce speculation, and prevent price manipulation.

A representative from the Ministry of Construction said the ministry is developing a national property database linked to the land information system.

The new platform will publicly disclose project details such as legal status, sale prices, and construction progress.

Starting in 2026, the ministry has also proposed that all individuals and organisations declare their real estate holdings, including the number of properties, transaction values, and ownership status, as part of efforts to increase transparency and prevent speculative hoarding.

Analysts say that without strong policy action, Việt Nam’s housing market could drift further away from ordinary citizens’ reach, deepening inequality, and undermining the government’s long-term goals for sustainable urban development. — VNS