Realty man thinks Vietnam aspanartments ‘cheaspanest in the world’

A businessman behind a real estate company based in Ho Chi Minh City believes apartments in Vietnam are selling at the lowest prices on earth, fueling a controversial subject among local property firms.

While Nguyen Xuan Quang, chairman of Nam Long Investment Co. JSC, admits that local salaried workers have to save for a long time to afford an apartment or a house, he does not think it is a sound reason to say that properties in Vietnam are too expensive.

“Vietnam’s housing prices are the cheapest in the world if you apply a fair calculation,” he was quoted by VnExpress as saying on the sidelines of the company’s shareholder meeting in Hanoi on Thursday.

While an affordable apartment in Ho Chi Minh City fetches only US$30,000-$40,000, a similar flat in other cities of the same scale as the Vietnamese city, such as Bangkok, Hong Kong, or Manila is $300,000, Quang argued.

The chairman claimed that Vietnam’s real estate market is facing a huge challenge of sustainable development thanks to low selling prices and poor profitability ratios.

“We cannot sell the apartments at high prices at a time when most people are still getting low salaries,” he elaborated.

Quang’s view of the issue is particularly shared by Le Hoang Chau, chairman of the Ho Chi Minh City Real Estate Association, according to VnExpress.

“It’s true to say affordable houses in Vietnam are cheaper than in many countries,” the Hanoi-based newswire quoted Chau as saying.

The association chairman added that even in the high and deluxe segments, there are also “huge price disparities” between Vietnam and other regional countries.

Obviously, there are people who disagree with these two men.

Mai Duc Hung, general director of Viet Do Co., a Ho Chi Minh City-based property developer, said the income of homebuyers should also be counted when saying whether the housing prices are expensive or not.

An apartment of the medium and deluxe segments in Singapore, Malaysia, or Shanghai is priced between $500,000 and $600,000, three to four times more expensive than their peers in Vietnam, according to Hung.

Affordable housing in Hong Kong, the Philippines, and Thailand is worth around $300,000 each unit, still sevenfold the rate in Vietnam.

But what is important is the income of people in these places is much higher than the Vietnamese homebuyers, Hung underlined.

“Vietnam is not the country where houses are sold at the world’s cheapest prices because most of the consumers cannot afford a house with their income,” he said.

A Vietnamese laborer currently receives $150 to $180 a month, whereas their peers in many other regional countries are paid up to $1,500.

Vietnam’s gross domestic product was around $184 billion in 2014, according to the General Statistics Office. With a population of 90.73 million, the country’s GDP per capita was $169, very modest compared to other regional countries.

“With average wage and GDP per capita both standing at low levels, houses remain a luxury for many Vietnamese people,” Hung said. “And that’s why houses in Vietnam are still too expensive.”

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Realty man thinks Vietnam aspanartments ‘cheaspanest in the world’

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