Reasons why apartments are becoming increasingly expensive; Developers of social housing projects rarely make a profit of 10%.

In 2025, affordable apartments will see a sharper price increase than luxury apartments; Hanoi is about to launch nearly 14,000 houses for sale, most of which are expensive; Hanoi requests police to crack down on bribery in the purchase of social housing.

In 2025, affordable apartments will see a sharper price increase than luxury apartments; Hanoi is about to launch nearly 14,000 houses for sale, most of which are expensive; Hanoi requests police to crack down on bribery in the purchase of social housing.

Here are the highlights of the real estate market this week.

Each square meter of an apartment bears the burden of dozens of different costs.

Reporters from Baodautu.vn (Investment Online Newspaper) surveyed the market and contacted many businesses, all of whom stated that the price increase was not imposed by the developer, but was based on investment costs. Specifically, for apartment projects, the price per square meter sold to customers includes no fewer than 10 types of costs.

Rising land and construction costs, coupled with lengthy permit application processes, have led to a sharp increase in apartment prices.

Firstly, there's the cost of land. To develop a real estate project, investors need land, and land prices are currently quite high. For example, in Binh Duong , an area bordering Ho Chi Minh City, a plot of land exceeding 5,000 m2 suitable for a real estate project would cost between 200 and 300 billion VND. Businesses typically use only 30% of their own capital to purchase this land, borrowing the remainder from banks at interest rates usually around 10% per year.

Secondly, even if the land is available, if it has not yet been cleared, compensation for land clearance will have to be carried out, and this cost usually accounts for 30% of the investment cost.

Thirdly, after acquiring the land, the enterprise will proceed with the legal procedures for the project, with the cost of obtaining legal permits ranging from 10% to 15% of the total investment capital of the project.

Fourthly, there is the land use tax. This tax is applied according to the land price list issued by the province or city, based on the current land price list.

Fifthly, there are project construction costs. Currently, the prices of cement, bricks, steel, sanitary equipment, and interior furnishings are increasing. For high-end projects, this will be at 20-30 million VND/m2, while for mid-range projects it will be at 15-20 million VND/m2. Typically, the initial investment costs are financed by bank loans. For a 20-story project with over 700 units and one basement level, the construction cost would be approximately 1,000 billion VND, with a common interest rate of 10% and a construction period of 28 months. Therefore, nearly 300 billion VND will be in interest payments for construction, which will be factored into the selling price of the houses.

Sixth is the marketing and sales cost. This cost is approximately 10% of the project's investment capital and is also added to the selling price to customers.

Seventh is the commission fee for brokers. In the current apartment market, the commission for brokers is 6-7% of the price of each unit sold. This cost is also added to the selling price of the house.

Eighth, there are sales costs, such as discounts like giving away gold or cars to customers. These costs amount to approximately 1% of the product value.

Ninth is the corporate income tax expense, which is at 20%.

Tenth is the cost-benefit analysis for each project. The profit margin will be calculated by the business to be at least 20%.

Finally, there are the project management costs and the salaries of the company's personnel.

Not to mention, if the project's legal procedures are delayed, lasting 4-5 years, the annual bank interest that the business incurs on the loan will be directly passed on to the house price.

In 2025, affordable apartments will experience a sharper price increase than luxury apartments.

Recently, Vietnam Report Joint Stock Company published its ranking of the top 10 reputable real estate companies in 2025. Notably, the ranking included predictions about future real estate prices. The survey revealed that most businesses believe prices will continue to rise in 2025.

Real estate price fluctuations by segment.

Specifically, the housing, luxury apartment, office rental, industrial real estate, and land segments will see a slight price increase of less than 10%.

Meanwhile, the affordable to mid-range housing and apartment segment is expected to see larger increases, ranging from 20% to 30%. As for the resort real estate segment, businesses believe prices will remain relatively stable. This is also the segment with the slowest recovery rate after the difficult period.

Notably, Vietnam Report assesses that the real estate market is experiencing significant fluctuations following information about local mergers. Currently, many investors are actively seeking land in areas slated to become administrative centers. This has led to a sharp increase in land prices, with some areas seeing increases of up to 20% even before official announcements.

Hanoi is about to put nearly 14,000 houses up for sale, most of them expensive.

The Hanoi Department of Construction has just updated the list of future housing projects eligible for sale in the city. Accordingly, 11 new housing projects have been approved, adding 13,995 units to the market supply.

A new apartment project is now open for sale in Ha Dong district. Photo: Thanh Vu

Of these, apartments continue to dominate with 8,798 units across 5 projects. The low-rise segment has 6 projects, providing 5,197 units.

Most of the apartment projects are located within the two large urban areas of Ocean Park and Smart City. Among them, Masterise Homes has the largest number of apartments for sale with 2,461 units. These are high-rise products from buildings Z34, U38, and U38A on plot B6-CT01 (Ocean Park 1).

Additionally, another project at Ocean Park will also be launching more than 2,000 apartments in the near future. This is the U26A, T26M, Z30 apartment complex located on plot B4-CT01, developed by CapitaLand.

In the low-rise housing segment, the two largest projects are located in the western area of Hanoi. The Sunshine Grand Capital urban area has been approved for sale with approximately 2,300 units. This project spans the communes of Tan Lap and Tan Hoi (Dan Phuong district) and Duc Thuong and Duc Giang (Hoai Duc district).

Also in Dan Phuong district, Vingroup 's Green City urban area has been granted permission to sell 2,279 units. The project covers an area of 133.4 hectares, located in four communes: Tan Hoi, Tan Lap, Lien Ha, and Lien Trung (Dan Phuong district). This project was only launched on March 10th.

Entering 2025, the supply of housing in Hanoi will no longer be scarce. However, another challenging problem has emerged: a supply-demand imbalance, with the high-end segment almost completely dominating the market, while the affordable housing segment is severely lacking.

Profit margins for social housing developers rarely reach 10%.

Speaking to a reporter from Baodautu.vn , a media representative from BIC Vietnam stated that the 2023 Housing Law stipulates a maximum profit margin of 10% for social housing developers. However, in most projects, businesses find it difficult to achieve this rate.

Currently, developers are only allowed a maximum profit of 10% when building social housing. Photo: Thanh Vu

In reality, the profit margin this company earns is only around 7%. This profit is barely enough to keep the business running. Nevertheless, the company perseveres in developing affordable housing to demonstrate social responsibility, build a reputation, and ultimately sell other commercial products.

Previously, in an interview with the online newspaper Dau Tu , Mr. Tran Duc Vinh, Chairman of the Board of Directors of Tran Anh Group, stated that in Long An province, social housing apartments with an area of 40 m2 and a mezzanine floor are sold at a price of approximately 15 million VND/m2. However, construction costs have already reached 10 million VND/m2, not including loan capital, land costs, etc.

"For each square meter, we only make a profit of 1 million VND, or about 5%," Mr. Tran Duc Vinh revealed.

In a similar situation, Mr. Le Huu Nghia, Director of Le Thanh Real Estate Company, said that a maximum profit margin of 10% is too low. Meanwhile, the total time to complete a project, from licensing to investment and construction, lasts about 7 years.

"It is estimated that the investor only earns about 1.3 - 1.5% profit each year, which is not enough for reinvestment," commented Mr. Le Huu Nghia.

In light of the above situation, the Ministry of Construction is seeking feedback on a draft resolution piloting specific mechanisms and policies for the development of social housing, which will be submitted to the Government for consideration and approval by the National Assembly. The draft stipulates many preferential and more flexible mechanisms for investors in social housing projects.

Notably, the Ministry of Construction has proposed increasing the profit margin for developers of social housing projects from 10% to a maximum of 13% of the total project construction costs. Developers will use this profit margin as a basis for setting the selling price, lease-purchase price, and rental price of social housing.

The new profit margin will apply to all social housing projects and housing for the armed forces, built on public land and the 20% land allocation of commercial housing projects. In addition, this policy also applies to completed social housing projects that have not yet received approval from the State management agency for selling, renting, and lease-purchasing prices.

Hanoi requests police to crack down on bribery in the purchase of social housing.

Recently, the Hanoi Department of Construction requested the city's police to strengthen their guidance to commune-level police (where social housing projects are located) to review and handle brokers who exploit loopholes to accept and submit applications for purchase/rental/lease-purchase in violation of the law. Any fraudulent acts in declaring and verifying social housing applications, when discovered, including during post-audit processes, will be handled according to current regulations.

The Department of Construction also requested the Department of Natural Resources and Environment to direct the Land Registration Office to facilitate the process for people to declare their housing eligibility. At the same time, the People's Committees at the commune level should also support people in verifying their housing eligibility, income, and eligibility for preferential loans.

Right in front of the N01 Ha Dinh social housing project (Thanh Tri district), a real estate company brazenly offers services to process applications. Photo: Thanh Vu

Please note that applicants can only submit applications directly to the developer, not through intermediaries or real estate agencies. Before selling/leasing/lease-to-own social housing, the developer is responsible for reporting to the Department so that information regarding the application period and selling price can be publicly posted on the department's website.

Previously, according to an investigation by reporters from Baodautu.vn , some real estate agencies and brokers continuously advertised the sale of newly allocated social housing units with a markup ranging from 200 million VND to 1 billion VND compared to the original price.

On social media, many self-proclaimed real estate experts are also selling "guaranteed" social housing purchase opportunities. These individuals brazenly claim that they have connections with businesses, which gives them such advantages.

Even the application processing consultation, which is usually provided free of charge by the developer, is being exploited by organizations and individuals who charge fees of 5-10 million VND per application. Some units even openly display signs offering application processing services right in front of social housing projects.

The Ministry of Construction demands clarification regarding the incident where residents braved the rain to demand the handover of social housing.

Deputy Minister of Construction Nguyen Van Sinh has sent a document to the Hanoi People's Committee requesting an investigation into information regarding residents braving the rain to demand that the developer hand over social housing units.

When first launched, social housing in the Dai Mo urban area was priced almost on par with commercial apartments in the area. Photo: Dung Minh

Earlier on February 25th, dozens of customers who purchased apartments in building HH4 of the Dai Mo urban functional area project (Dai Mo ward, Nam Tu Liem district, Hanoi) gathered at the FLC Landmark Tower on Le Duc Tho street. Many held banners in the rain to demand that the investor, Alaska Real Estate Investment Joint Stock Company, a subsidiary of FLC Group, hand over the apartments as promised.

Customers stated that they signed contracts to purchase apartments in 2020, with the expected handover date in the second quarter of 2022. However, the developer failed to fulfill its commitments and delayed the handover three times. Furthermore, some customers have paid the full value of the apartment, including the 2% maintenance fee as stipulated, but have still not received their homes.

Based on Clause 15, Article 75 of Government Decree No. 100/2024 detailing some provisions of the Law on Housing regarding the development and management of social housing, the Ministry of Construction requests the People's Committee of Hanoi to direct relevant agencies to investigate and clarify the above-mentioned issues and report the results to the Ministry before March 30, 2025.

In the latest notice sent to customers on February 25th, the developer projected that the power grid connection would be completed before March 15th; the technical systems and fire safety inspections would be conducted between March 15th and April 15th; and the relevant authorities would be invited to conduct the final inspection before April 25th. However, many residents have expressed concerns about the legitimacy of this notice, as the representative's signature lacks a specific title.

The HH4 social housing building is 29 stories high, comprising 173 social housing units for sale, 57 units for rent, and 58 commercial units. Apartment sizes range from 48 to 70 square meters.

Applications for purchasing apartments began in April 2021. The developer committed to handing over the apartments in the second quarter of 2022. The selling price, as approved by the Hanoi Department of Construction, is over 16.8 million VND (including 5% VAT, excluding 2% maintenance fee).

Quang Ngai removes obstacles to a 450 billion VND social housing project.

The HUD - Phu My Social Housing Project is located on a high-rise residential plot within the Phu My Urban Area project in Quang Ngai City. The project is invested in by the Housing and Urban Development Corporation (HUD).

The project will involve the construction of two new 9-story apartment towers, comprising approximately 384 apartments on a total land area of 15,567 m2, with a total floor area of 36,700 m2, accommodating approximately 1,000 people. The total investment is approximately 450 billion VND, and the project is scheduled for completion between 2025 and 2028.

Rendering of the HUD - Phu My Social Housing Project.

According to the investor's representative, as of now, out of the nearly 16,000 m2 of land (for which a social housing project is requested), approximately 2,955 m2 has not yet been fully compensated and cleared.

For the remaining area (without any obstacles), the investor is currently developing essential technical infrastructure, which is expected to be completed in 2025.

Regarding the implementation progress, HUD Corporation has hired a consulting firm to prepare the feasibility study report, basic design, and documentation, which have been completed and are currently undergoing technical review.

The investment project and construction drawings are expected to be approved in 2025; from 2026-2027, phase 1 of the project, comprising 192 apartments in block B, will be completed; and phase 2, with 192 apartments in block A, will be completed by 2028.

Four urban planning projects for old apartment complexes in Dong Da district were completed in March.

On March 20th, the Office of the People's Committee of Hanoi City issued Notice No. 139/TB-VP regarding the conclusions of Vice Chairman of the People's Committee of Hanoi City, Duong Duc Tuan, at a working session on four detailed planning projects for the renovation and reconstruction of the old apartment complexes in Kim Lien, Trung Tu, Khuong Thuong, and Hao Nam, Dong Da District, Hanoi City.

Accordingly, after hearing the report from the leaders of the Dong Da District People's Committee, the planning consultancy unit, and the opinions of the delegates attending the meeting, Vice Chairman of the Hanoi People's Committee Duong Duc Tuan unanimously concluded and directed as follows:

Regarding the progress, the People's Committee of Dong Da District will closely coordinate with the Departments and agencies of Hanoi City, simultaneously implementing procedures for gathering opinions from the community, reporting to the Hanoi City Planning and Urban Planning Appraisal Council and relevant agencies, completing the four aforementioned detailed planning projects in March 2025, submitting them to the Department of Planning and Architecture for appraisal in April 2025, and submitting them to the Hanoi City People's Committee for consideration and approval in May 2025.

Regarding the method for calculating the necessary floor area for housing to be allocated in planning projects: The floor area of housing in planning projects is determined based on the principle of conformity with the Housing Development Program, Decision No. 34/2024/QD-UBND dated May 27, 2024, of the Hanoi People's Committee.

Source: https://baodautu.vn/batdongsan/ly-do-chung-cu-ngay-cang-dat-do-chu-dau-tu-nha-o-xa-hoi-hiem-khi-lai-du-10-d257458.html