House prices in Vietnam are 20 times higher than income

In the latest document sent to the Prime Minister on urgent solutions to drag down housing prices that are too high, HoREA said that housing prices have increased continuously for more than 5 years, reflected in the house price index. in our country is more than 20 times higher than the average income of the society. According to HoREA, compared with industrialized countries, the house price index is only 6-7 times higher than income

“High housing prices make it difficult for many households and individuals to create housing,” HoREA emphasized.

Regarding the reason for the continuous increase in housing prices, HoREA said that currently, the real estate market is very short of housing supply, especially affordable commercial housing (affordable housing) and residential housing. Social housing are two types of houses that meet the real needs of the majority of middle-income people and urban low-income people.

“Due to the “shortage of supply” while the total “demand” is very large, according to the law of supply and demand, housing prices have increased continuously for more than 5 years, HoREA said.

According to HoREA, the market situation of both “supply-demand” imbalance and “out-of-phase” imbalance in the high-end housing segment has been very evident in the last 2 years. Accordingly, affordable housing accounts for only 1% in 2020 and disappears in 2021 (0%), while high-end housing accounts for 74%.

This leads to the state budget revenue from the land and the real estate market not commensurate with the potential, which is clearly shown in the revenue from land use levy in Ho Chi Minh City in the period 2016-2021 which is 82,932. billion dong only accounts for 5.9% of the total budget revenue, but in terms of potential, this revenue can reach around 10% to be appropriate.

According to HoREA, affordable houses have disappeared in 2021 (Artwork)

HoREA believes that in order to ensure social security for housing, it is necessary to perfect mechanisms and policies to create conditions for the development of social housing and the type of “residential affordable housing” of the majority of people. In the society are people with middle income and people with low income in urban areas, including: cadres, civil servants, state officials, armed force officers…

“In order to have more social housing and “houses at affordable prices”, it is necessary to remove the “obstacles and inadequacies” of a number of current legal provisions and add new mechanisms and policies ( currently not available) to promote the development of social housing and “affordable housing”, proposed by HoREA.

In addition, in order for the real estate market to develop transparent, healthy, stable and sustainable, HoREA believes that it is still necessary to review to perfect mechanisms and policies on capital market development, including the capital market. money-credit market, stock market, corporate bond market, coupled with property tax policy development.

Along with that, it is necessary to change the current method of calculating land use levy by issuing a new tax on the act of changing the planned land use purpose from agricultural land to non-agricultural land and residential land.

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