Difficulties for social housing.

Hanoi and Ho Chi Minh City have seen thousands of people competing for social housing, but some localities are experiencing slow sales, even facing the risk of oversupply.

The social housing program is accelerating with the prospect of completing the target of 1 million units ahead of schedule. However, the paradox of high demand in some areas and slow sales in others has begun to emerge. Photo: Ngoc Mai/Tien Phong.

After years of being considered a bottleneck in the real estate market, the social housing development program is seeing positive changes. A series of obstacles related to investment procedures, land allocation, site clearance, and investor selection have been removed, creating momentum for the acceleration of new supply nationwide.

Social housing projects are springing up like mushrooms.

According to the Ministry of Construction , there are currently 781 social housing projects underway nationwide, comprising approximately 720,055 units. The government estimates that if the current pace is maintained, the target of completing 1 million social housing units could be achieved as early as 2028, about two years earlier than initially planned.

These changes in supply are occurring against the backdrop of continued high demand for affordable housing in major cities, with thousands of people competing for a chance to buy in many social housing projects.

Earlier this year, over 12,000 people applied to buy social housing at the Ly Thuong Kiet project in Ho Chi Minh City. However, only about 750 apartments were offered for sale. Notably, about half of the housing units were allocated to priority groups. Of the remaining units, the majority were reserved for groups whose land was expropriated for state-funded projects. This means that the actual number of apartments available for eligible groups is only slightly over 100.

In Hanoi , more than 3,600 applications were also submitted to register for the purchase, rental, and lease-to-own of social housing at the project in Thien Loc commune (formerly Dong Anh district), while the supply is only 929 units.

Earlier last year, thousands of Hanoi residents brought plastic chairs, food, and drinks and lined up overnight in front of a social housing project in Dong Anh to submit their applications.

Over the past six months, many social housing projects launched in Hanoi have recorded registration numbers many times higher than the number of apartments available.

The appeal of this segment is not difficult to explain. While the prices of commercial apartments in Hanoi and Ho Chi Minh City are constantly setting new benchmarks, with many projects exceeding 100 million VND/m2, or even higher, the price of social housing is only about 25-30%. Social housing has therefore become almost the only option for many workers and middle-income earners in large cities.

There is still a problem of unsold social housing units.

The rapid increase in supply is a positive sign. However, the market's absorption capacity is uneven across regions and projects, creating new paradoxes in the social housing segment.

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Even in major cities like Hanoi and Ho Chi Minh City, where many projects are constantly overwhelmed with applications, some social housing projects still face the challenge of selling their units.

For example, the THT New City project (also known as Bright City or AZ Thăng Long) in western Hanoi has yet to sell all its apartments after more than 10 years of development. In the South, the Thanh Tan social housing project in Di An ward is not only facing delays in handing over apartments to many customers who paid years ago, but is also struggling to find buyers in recent sales launches.

The supply of social housing is increasing rapidly thanks to the removal of obstacles in policies, but some projects are facing pressure to sell. Photo: Duy Hieu.

Slow sales are also occurring in some localities such as Lao Cai, Gia Lai, and Bac Ninh - considered the industrial hub of the North.

Mr. Nguyen Anh Que, Chairman of G6 Group, believes that the market is entering a new phase as procedures for developing social housing have improved significantly.

According to him, the time required to implement investment projects, which previously took 2-4 years, has now been reduced to approximately 3-12 months. Many procedures related to land and site clearance have also been significantly shortened.

However, pressure from oversupply is present in some localities. The Chairman of G6 Group cited the example of Lao Cai, where many projects are selling slowly. In Gia Lai (an area formerly belonging to Binh Dinh province), a social housing project near an industrial zone launched nearly 400 units in March but has only sold 17 units so far. Similarly, in Bac Ninh, several large-scale projects with thousands of apartments are also facing difficulties in finding buyers.

According to Mr. Que, the reason stems from the fact that many localities are implementing social housing projects according to assigned targets without fully assessing actual needs. In particular, developing social housing around industrial zones could pose risks if the primary focus is on selling to workers.

According to him, the workforce in industrial zones is currently highly mobile, with seasonal work, and not everyone has a need to settle permanently at their workplace.

"Selling housing for workers is a very risky model. If the State invests in renting it out at low prices, it could be more effective. But letting private businesses build social housing to sell to workers is not as simple as many people think," he said.

Beyond the supply and demand issue, the Chairman of G6 Group believes that some current regulations are also revealing limitations.

According to him, social housing was initially designed for low-income urban residents. However, the majority of current projects are being implemented in suburban areas or near industrial zones.

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"The current law doesn't define low-income earners in rural areas. This means many local people with genuine needs are not eligible to purchase social housing," he said.

Mr. Que proposed that the Chairman of the Provincial People's Committee be given the authority to determine the income threshold for purchasing social housing, instead of applying a single nationwide rate. According to him, the income level considered low in Hanoi and Ho Chi Minh City can be very different from that in mountainous or rural areas, and even within the same province, the thresholds may vary. Therefore, he believes that applying a single income ceiling for purchasing social housing to all 34 provinces and cities by the state management agency is unreasonable.

Source: https://znews.vn/kho-cho-nha-o-xa-hoi-post1657275.html