A real estate project under construction in District 7 (Ho Chi Minh City) - Photo: QUANG DINH
The imbalance between supply and demand is making the dream of owning a home increasingly out of reach for many people...
To address the supply-demand imbalance, at a recent meeting on the real estate market, the Standing Committee of the Government requested the Ministry of Construction , the State Bank of Vietnam, and relevant ministries and localities to implement a series of solutions to remove obstacles, such as creating land funds, researching medium-term credit packages with stable interest rates for affordable commercial housing projects, and credit packages for young people to borrow to buy houses.
Simultaneously, strict measures will be taken against price manipulation and the creation of artificial price surges in order to control housing prices.
House prices are skyrocketing.
According to the Ministry of Construction, the real estate market showed many positive signs in the first months of 2025, with both supply and transaction volume increasing compared to the same period in 2024.
However, supply remains limited and does not meet market demand; the product structure is unbalanced, lacking housing suitable for workers and young people; there is an oversupply of villas and low-rise houses; and real estate and housing prices are not affordable for those in need. Speculation, manipulation, price inflation, and market disruption still persist.
In Ho Chi Minh City, most projects launched from the end of last year to the second quarter of this year have focused on the high-end and luxury apartment segment, with prices ranging from 100 to 150 million VND/m², and even higher in the central area.
According to a survey by Tuoi Tre newspaper in the eastern part of Ho Chi Minh City, apartments in new projects in Thu Duc City are being offered to buyers at prices above 100 million VND/m². Some projects near the An Phu intersection (Thu Duc) are even "offering" prices as high as 120-150 million VND/m².
In the southern part of the city, encompassing Binh Chanh and Nha Be districts, projects are being sold to customers at prices ranging from 64 to 80 million VND/m².
In District 1 alone, only a few apartment buildings still have units available, but the selling price ranges from 200 to 300 million VND/m², with some places reaching 400 to 500 million VND/m².
Not only in the primary market, but the market for older apartments also maintains sky-high prices. In some projects that have been operational for nearly a decade, the selling price of apartments has doubled, currently trading at 4-5 billion VND per unit.
According to market research firms, the price of affordable apartments in suburban areas of Ho Chi Minh City is currently ranging from 45 to 55 million VND/m². At this price, a 50m² apartment would cost approximately 2.2 billion VND.
Apartment buildings along Vo Nguyen Giap Street, Thu Duc City, Ho Chi Minh City - Photo: QUANG DINH
In Hanoi , housing prices have skyrocketed from the second half of 2024 to the present, and commercial apartments priced under 50 million VND/ m² have almost disappeared, even in areas outside the Ring Road 3.
At a real estate brokerage in the Nam Tu Liem area (where the developer is selling projects in Hung Yen and other areas of Hanoi including Dong Anh, Gia Lam, and Nam Tu Liem), even on a weekday, it was packed with cars and motorbikes belonging to brokers and people coming to view the model homes.
According to a survey in Nam Tu Liem district, some commercial apartment projects are being offered for sale by developers at prices ranging from 120 to 160 million VND/ m² .
Ms. Minh Huong, a real estate agent, said that there are no more apartments in Nam Tu Liem district priced below 50 million VND/m2. A project near Le Quang Dao street is also offering apartments at 120-150 million VND/ m2 , excluding value-added tax and maintenance fees.
For apartments with good views, the price is around 150 million VND/ m² . A three-bedroom apartment of about 100m² also costs between 13 and 15 billion VND.
Additionally, some completed apartment buildings in Thanh Xuan district (Hanoi) are being advertised by brokers at 74 million VND/ m² , while apartments in commercial apartment complexes on Pham Van Dong street (Bac Tu Liem district) are being offered at 67 million VND/ m² .
Housing prices rise due to bureaucratic bottlenecks.
Speaking to Tuoi Tre newspaper , Mr. Nguyen Hoang Minh, deputy general director of Saigon 5 Real Estate Development Joint Stock Company, said that house prices in large cities like Ho Chi Minh City are being pushed up too high, partly due to bottlenecks in administrative procedures.
For example, a project by a company that has been under development since 2018 is "stuck" in procedural stages, causing the expected house prices to at least double compared to the initial price.
Mr. Minh cited the example of this company's initial project in District 8, which was launched onto the market at a price of 26-28 million VND/m² before 2020.
However, due to legal obstacles, the project has been temporarily suspended until now, causing the company to incur an additional bank interest debt of over 51 billion VND, not to mention many other increased financial costs.
Therefore, if the project were to be launched and sold this year, the company anticipates having to recalculate the selling price, increasing it by at least double, because in addition to financial costs, other costs such as construction materials, construction costs, and business expenses have also increased.
"If there weren't any procedural obstacles, we could have built and sold quickly, and people would have settled in 4-5 years ago. But because the project is delayed, those financial overruns are ultimately added to the selling costs, and homebuyers have to bear the burden, making it impossible for house prices to be as affordable as people and businesses would like," Mr. Minh explained.
According to Ms. Duong Thanh Thuy, Vice President of Trung Thuy Group, for apartment projects, land costs only account for 30%, financial costs account for 30% if the construction takes three years, and construction costs, which were previously only 15%, have now increased to 20-25%.
According to her, these are "fixed" costs, so if the project is delayed due to legal procedures, leading to delays in progress, and this extends to four years, the financial costs will increase by 40%, or if it is delayed even longer, the financial costs will also "balloon".
Affordable housing will be impossible if land costs remain high and financing costs escalate year after year, as is happening in many housing projects.
Sharing the same view, Mr. Tran Khanh Quang - director of Viet An Hoa Company - believes that the most crucial factor for affordable real estate prices is low land prices. The cost of construction materials does not significantly affect the overall real estate price.
For a 50m² apartment priced at 5 billion VND in the heart of Ho Chi Minh City, the cost of materials is only about 1 billion VND, accounting for a small portion of approximately 15-20% of the selling price.
Residents go through the procedures for building houses in Binh Thanh District, Ho Chi Minh City - Photo: HUU HANH
Support is needed for first-time homeowners.
To address the shortage, businesses and experts alike agree that solutions are needed to rapidly increase the supply of housing, especially in the affordable housing segment.
In addition, there is a need for policies to support first-time homeowners, regardless of age, with the clearest form of support being interest rate policies.
Given the scarcity of land in the central areas of Hanoi and Ho Chi Minh City, Mr. Nguyen Van Dinh, Vice Chairman of the Vietnam Real Estate Association, believes that it is necessary to plan and allocate land in the suburban areas of these two cities for the development of affordable housing.
Priority should be given to land plots with existing transportation infrastructure connecting to the centers of the two cities for the development of affordable housing.
For the remaining areas, the planning of land for affordable commercial housing needs to be synchronized with investment in connecting transportation infrastructure to create suitable living spaces for the people.
Furthermore, developing affordable housing requires a specific strategy, in which the government needs to sit down with local authorities to plan the development of affordable housing for people in provinces surrounding Hanoi and Ho Chi Minh City.
Meanwhile, Mr. Nguyen Hoang Minh believes that if state agencies quickly remove obstacles in legal procedures, businesses can start construction sooner, projects will incur fewer financial costs, and the costs that make up the price of houses will decrease.
Meanwhile, the vice chairman of Trung Thuy Group suggested that land and financial costs need to be adjusted, with the State potentially adjusting land costs to around 20% instead of the current 30%.
In particular, non-financial measures (essentially financial solutions) can be promoted by expediting procedures, preventing projects from falling into a state of delayed implementation.
For example, instead of financial costs reaching 30% over three years, the government should partner with businesses to handle these processes within a single year, which would reduce financial costs to just 10%.
"If these two things are done, the significant reduction in project development costs will clearly impact housing prices. Businesses will then only need to maintain an acceptable profit margin, while the remaining costs will decrease, making housing more accessible to the public," Ms. Thuy added.
Administrative procedures need to be streamlined to reduce financial costs for businesses. (In the photo: a real estate development on Nguyen Huu Tho Street (Nha Be District, Ho Chi Minh City) - Photo: Tu Trung)
* Mr. Nguyen Quoc Hiep (Chairman of the Vietnam Construction Contractors Association):
Buyers bear the brunt of it.
The real estate market is currently experiencing a situation where "land prices are chasing house prices and house prices are chasing land prices," creating a vicious cycle where buyers ultimately bear the brunt of the price fluctuations. Part of the reason for this situation stems from the unregulated nature of land prices, which have driven them up to potentially be among the highest in the world.
In the same project, a difference of just a few months between previous and subsequent land allocation decisions can cause prices to increase by 20%, which is unreasonable and will drive up house prices.
Therefore, it is time for the authorities to step in and manage and control land prices in a harmonious manner.
Furthermore, lengthy administrative procedures such as land valuation will also cause businesses to incur additional financial costs such as loan interest or supplementary land fees, amounting to tens or even hundreds of billions of VND. These costs are all added to the selling price.
To control housing prices, it is necessary to quickly establish a state management mechanism for land prices, avoiding the current unregulated situation, and to expedite administrative procedures to reduce financial costs for businesses.
* Dr. Nguyen Quoc Hung (Vice President and General Secretary of the Vietnam Banking Association):
Preferential loan packages need to be disbursed to the right recipients.
Introducing a medium-term loan package with stable interest rates for affordable housing loans, specifically for young people buying homes, is the right policy.
However, for this loan package to be truly effective, it is necessary to review whether those buying and selling houses in the market today are buying to live in or buying for investment and speculative purposes.
Currently, the majority of transactions involve investors buying and selling with other investors. If this situation is not controlled, loan capital will not reach those who genuinely need to buy a home.
Furthermore, it is necessary to clearly define the eligible recipients of the loan package, as well as the criteria and standards for borrowing. Ideally, this loan package should only be available to first-time homebuyers.
Commercial properties priced at 35-40 million VND/m2 are suitable.
According to Mr. Nguyen Van Dinh, Vice Chairman of the Vietnam Real Estate Association, affordable commercial housing refers to housing that people with average and low incomes can afford. Therefore, this type of affordable commercial housing will range from 35 to 40 million VND/m2.
According to calculations by the Ministry of Construction, the current construction cost per square meter for high-rise apartment buildings is approximately 20 million VND/m2, so with a selling price of 35-40 million VND, investors are already making a profit.
Regarding land costs in the current apartment price structure, they typically account for 20-25% of the selling price in areas outside of central Hanoi. For projects in the city center, land costs can increase to 50% of the total price.
Hanoi real estate market - Photo: NAM TRAN
Worried about losing the opportunity to buy a house.
The dream of owning a home and establishing a stable life is becoming increasingly distant for millions of people, especially young people and those with middle incomes in large cities like Hanoi and Ho Chi Minh City.
Housing prices, already high, are now skyrocketing while workers' incomes remain stagnant, effectively destroying the home-owning plans of many office workers and civil servants.
"I work as a judicial officer at the ward, and my wife works as a notary public. We've saved up some money, but with the current high house prices, my wife and I no longer have the opportunity to buy a house. We've invested the money we earned, and currently, our family is still renting," said Hoang Van Minh (40 years old, from Thanh Hoa province).
Meanwhile, Ms. Nguyen Thu Trang (34 years old, from Phu Tho province) said that after more than 10 years of saving, she had accumulated some money, but after surveying the market, it was still not enough to buy an apartment of about 30 square meters.
"I'm single and want to buy an apartment, but after researching, I found that even a nice one costs around 2 billion VND. I've decided to rent instead because a 30m2 apartment in the urban area only costs about 8 million VND per month," Ms. Trang shared.
According to an expert from the Vietnam Real Estate Association, the real estate market is currently experiencing a shortage of affordable apartments, therefore developers who have properties to release onto the market are selling them at high prices.
Most homebuyers recently have been investors with the mindset of buying houses and waiting for prices to rise so they can make a profit; therefore, house prices on the market are not realistic.
The factors contributing to the increase in real estate prices include land prices, construction material prices, and loan interest rates - Photo: TU TRUNG
Streamlining procedures and reducing housing investment costs.
One of the key solutions in the Government Standing Committee's conclusions to promote the development of the real estate market in a safe, healthy, and sustainable direction is to strengthen decentralization and delegation of power, and to minimize administrative procedures.
In parallel with requesting a review and clarification of the causes of the increase in real estate prices such as land prices, construction material prices, loan interest rates, etc., the Standing Committee of the Government also requested ministries, sectors, and localities to focus on minimizing overlapping and unnecessary administrative procedures, and immediately eliminate complex paperwork and documentation requirements.
Ensure a reduction of at least 30% in processing time and 30% in administrative compliance costs. This includes studying the reduction of procedures related to investment policy approval, project appraisal, design, especially construction permit procedures, inspection and acceptance testing, reducing pre-approval checks, and strengthening post-approval checks.
In addition, solutions include increasing supply, lowering prices, and developing diverse real estate segments to meet the actual housing needs, especially of people with middle and low incomes.
In particular, the Government requests research and the development of policies to support young people and those with genuine housing needs, increasing their access to housing and contributing to the realization of the right to housing as stipulated in the Constitution.
The State Bank of Vietnam is required to focus on directing and urging banks to participate in the preferential loan program of 120,000 billion VND. In addition, ministries and agencies are tasked with researching and proposing a model for an "Electronic Real Estate and Land Use Rights Transaction Center managed by the State".
This will be an integrated system encompassing all stages from transactions, notarization, taxation, registration, etc., similar to stock market transactions. This model will ensure information transparency, prevent price manipulation, tax evasion, and market fraud.
Source: https://tuoitre.vn/giam-gia-nha-thao-go-phap-ly-co-hoi-dang-sang-dan-20250622092058922.htm
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