Generation Z & Alpha, How Will They Have A Stable Life?
Before going into today’s interesting topic, let’s talk a little about the brilliant pink trumpets on the streets of Saigon these days:
In mid-March, the streets of Saigon were dyed a faded pink. The streets of Dien Bien Phu, Ham Nghi, To Huu, and Vo Van Kiet near Mong bridge… everywhere were filled with pink trumpets. On this occasion, Phan Thanh Dat, born in 1999, spent the weekend carrying a camera to record beautiful moments of the city.
In the flowering season, the tree loses its leaves, and only flowers are left on the branches. Pink lilies are like a lovely highlight of the city because they only come once a year.
This year, the pink trumpets in Ho Chi Minh City bloom profusely and evenly, more beautiful than last year. They fade quickly, the best time to take pictures is in the morning, fresh petals, bright colors, not wilted. Guests can choose an outfit color that matches the color of the flower or choose white to exude tenderness.
Next to the fading pink trumpets, I suddenly remembered the work I needed to do today and the painful questions in my head:
- The opening of legal bottlenecks for new projects in HCMC is slow, leading to a limited supply of apartments from year to year
- The price therefore keeps increasing, not decreasing every year
- The demand for houses of Vietnamese people is always high, the percentage of people planning to buy house in Vietnam is the highest in Southeast Asia
With Millennials (1981-1996) or Gen X (1965-1980), having the advantage of a longer financial accumulation period, this group will certainly be more ready to own real estate at high prices.
But what will happen 5-10-15 years from now, for the next generation, Gen Z (born 1997-2012) or Gen Alpha (born 2010-2020)?
How much the price of real estate in Ho Chi Minh City reach in the next 15 years?
What will be the solution to own real estate for a stable life for the younger generation?
While the above problems still exist, interest rates on property bank loans are still high and for the younger generation, who are inherently fond of freedom, experience life for themselves and climb the ladder of success in their own lives, soon no longer wants to depend on the finances of their parents, these future generations, what’s the housing plan for them?
Generations by year of birth
Real estate ownership solutions for young Vietnamese in the future (or even now), include:
- Inherited from the previous generation
- Move to locations far from the center (Decentralization), where prices are more reasonable (To the East: Vinhomes Grand Park… or to the South: Nha Be…)
- Take advantage of the infrastructure push, connectivity, Metro to move from far away from the center to the workplace
But, there is still one possibility: the concept of “having a stable life” may be changed.
It is not necessary to own or buy real estate anymore. Once real estate prices are constantly increasing, ownership becomes too difficult, the rental solution will be more reasonable, ensuring both housing needs and financial balance for young people.
At that time, the cost of rent will be included in the cost of living and become a normal expense. This is suitable when the Vietnamese people’s living standards are improved, their income gradually increases and becomes more stable.
Renting instead of spending a large amount of money to buy real estate outright will create more opportunities to reinvest in business/production activities for young people, making less money flow into real estate speculation and helping the rental economy becomes stronger and more sustainable.
The rent for a 2-bedroom apartment is from $300-500/month, depending on the project, location, quality and utilities in Thu Duc City (far from the center), will be the first choices in the early years of their careers.
Other options, higher prices, closer to the center, better quality of life will cost from $800-1000/month, suitable when the income of working age members in nuclear family (2 generations living together: parents & children) from $1,500/month or more. Just like the elite expats who are renting and working in Vietnam, staying in projects like Vinhomes Central Park, Sunwah Pearl, Estella Heights or City Garden…
I have a French client, she owns a small apartment in Paris, where the land is tight, the people are crowded; there, like other busy & bustling cities, the land cannot expand further.
She shared that renting the apartment was very easy, the two young tenants who had just signed the lease were a pair of students studying at a nearby university. They even sent an email with a presentation about both of their backgrounds, ambitions, habits and future plans to prove that they deserve to rent the apartment in the long term, to help them commute to the university more convenient.
And because, it is too difficult to find an apartment in the center, when most of them have tenants or people live in, they are really as earnest as many other couples who want to find a place to live soon. Of course, the French client could not refuse when the tenant was so carefully prepared for such application.
What do you think about the above opinion? If you own more than 1 property in Ho Chi Minh City, your future rental prospects for Gen Z & Alpha will be very high. The money from the rental will also be even, the tenants will also be many and more competitive.
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