Despite the lack of supply, many social housing projects cannot find buyers.

According to a recent report by the Real Estate Brokers Association, the social housing market is currently experiencing uneven demand, with some areas facing supply shortages while others are unable to sell all their units.

For example, in some social housing projects in Da Nang, people had to queue from 4 am to submit applications to buy houses. These projects were also almost sold out as soon as they were launched. Meanwhile, in Bac Ninh, the industrial hub with a large number of workers, some projects, despite multiple sales launches, have only sold about one-third of their inventory.

Despite supply shortages, many social housing projects cannot find buyers (Figure 1). — Hundreds of people lined up to buy social housing in Da Nang .

This issue was also mentioned in a report submitted to the Ministry of Construction by the People's Committee of Bac Ninh province. According to the report, despite the investment and construction of tens of thousands of housing units for workers, workers in the province seem uninterested in buying houses.

To date, many completed or partially completed apartments from 7 worker housing projects have been put on the market, but very few workers in industrial zones have registered to buy them. Project owners have repeatedly advertised 1,681 worker housing units, with approximately 1,324 units still unsold.

Explaining this issue, the People's Committee of Bac Ninh province stated that the majority of workers are from other provinces with unstable residency and frequent job changes. In addition, the workers' incomes are low, making home ownership a significant challenge.

For that reason, Bac Ninh province also proposed that the Ministry of Construction study and amend regulations and policies related to the investment in the construction of synchronous technical and social infrastructure in large-scale social housing projects, ensuring the goal of reducing social housing prices to suit the income and affordability of social groups. At the same time, it requested specific regulations on the method of determining selling, renting, and lease-to-own prices for large-scale social housing areas with complete infrastructure.

Despite supply shortages, many social housing projects cannot find buyers (Figure 2). — Many social housing projects in Bac Ninh are failing to find buyers.

Previously, when discussing the problems facing the social housing market, Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, stated that, in addition to procedural issues, the interest rates in the 120,000 billion VND preferential loan package for social housing are still too high. This creates a burden for homebuyers.

Many eligible buyers lack the funds and are hesitant to borrow from banks, given the high interest rates of the 120 trillion VND credit package, reaching up to 7.7% per year, only lasting for 5 years and only 1-1.5% lower than commercial loan rates. Meanwhile, those with money are not among the eligible workers or those who qualify for purchase.

Furthermore, the regulations regarding eligibility for social housing are no longer appropriate. For example, the requirements for housing, residency, and income levels are no longer suitable. Specifically, the residency requirement includes having permanent residency registration in the project area or temporary residency registration for one year or more.

Or consider the outdated regulation that those eligible to purchase social housing must not be subject to personal income tax, meaning their monthly salary cannot exceed 11 million VND. While the price of social housing has nearly doubled in 5 years, the method of determining low income – a crucial condition for purchasing a home – remains the same as it was 8 years ago.

At a recent workshop, the Ministry of Construction also acknowledged that the social housing construction program, while achieving noteworthy results, has not yet met expectations. The main reasons are the lack of land, obstacles in the investor selection process, a lack of preferential capital, insufficient and ineffective incentive mechanisms, and complex and lengthy investment and development procedures. Furthermore, some organizations and individuals have not complied with social housing regulations due to insufficient or inadequate penalties.

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