'New player' in the real estate market

The 'new player' is not a corporation, but rather the policies aimed at creating a housing supply suitable to people's purchasing power. If implemented well, it can change the unreasonable situation of the real estate market in the near future.

Thang Long Green City social housing area, in Kim Chung new urban area, Hanoi - Photo: B.NGOC

The "new player" has a lot of "goods" in hand. That is, assigning specific targets for building social housing to each locality to achieve the goal of 1 million social housing units; designing sample models to build in bulk and increase profits to encourage businesses to build social housing.

In March, we must establish a national housing fund, and there are a series of policies to remove difficulties for real estate projects that are facing legal problems...

Source: Ministry of Construction - Graphics: T.DAT

Sad reality: apartment prices keep going up

The demand for housing is too high while the supply is limited, mainly from mid-range, high-end and luxury commercial housing projects, pushing apartment prices far beyond their real value.

According to Tuoi Tre 's records at the NHS Trung Van social housing project (Nam Tu Liem district, Hanoi), there is a huge difference between the selling prices of social housing apartments and commercial apartments in the same building.

While the selling price of social housing in NHS Trung Van building was announced by Hanoi Department of Construction in May 2023 at about 19.5 million VND/ ^m2 , the selling price of commercial apartment fund (about 20% of total number of apartments in the project) is being offered for sale at 60 - 70 million VND/ ^m2 .

In the same project and with the same infrastructure and construction quality, the selling price of commercial apartments is 3 times higher than the selling price of social housing apartments.

Similarly, the selling price of the Udic Ecotower Ha Dinh social housing project (which Udic Infrastructure Development Investment Corporation has just started construction on plot N01, Ha Dinh new urban area, Tan Trieu commune, Thanh Tri district, Hanoi) was announced by the Hanoi Department of Construction in February 2025 at about 25 million VND/ ^m2 , rental price 150,000 VND/ ^m2 /month, lease-purchase price 390,000 VND/ ^m2 /month.

Meanwhile, the selling price of commercial apartments in neighboring areas with the same social infrastructure and traffic connections such as Eco Green City, D3 Vinaconex 2 building, QMS To Huu, The Charm An Hung are being advertised for sale from 55 - 75 million VND/ ^m2 .

The above situation shows the shortcomings of the current housing market. The price of social housing controlled by the State (with the investor's profit margin of 10%) is kept at a level affordable for the majority of people with average and low incomes (about 20 - 25 million VND/ ^m2 ), while the price of commercial housing (due to scarcity) depends on the offering price of project owners, which is pushed up to an abnormal level (from 55 - 75 million VND/ ^m2 ) even though the quality of housing is not much different.

The situation of apartment prices constantly increasing also pushes the prices of apartments that have been used for 5-10 years, with unchanged or even degraded amenities, to increase by 1.5-2 times in 2024.

NHS Trung Van social housing area (Nam Tu Liem, Hanoi) - Photo: BN

Many apartments for sale, will prices keep going up?!

The Government has requested relevant ministries and sectors to complete the establishment of a national housing fund by March 2025 to sharply increase the supply of social housing and low-cost commercial housing, suitable for the income of the majority of people with middle and low incomes, and industrial park workers.

Many experts believe that the establishment of a national housing fund along with a series of solutions to promote the development of social housing will help increase the supply of affordable housing in the coming time, thereby reshaping the housing market and reducing house prices in the coming years.

Mr. Nguyen Van Dinh - Chairman of the Vietnam Real Estate Brokers Association - said that establishing a national housing fund in the long term will create market stability, and meet people's minimum housing needs, but it will take time to have a housing supply.

However, in the short term, information about establishing a national housing fund will create market confidence, and workers and low-income people will believe that there will be affordable housing to buy.

According to Associate Professor Dr. Nguyen Quang Tuyen - Vice Chairman of the Board of Hanoi Law University, the Government has correctly identified the defect of the real estate market, which is that supply is too low compared to demand. Previously, the State only issued policies, but the increase in supply depended on investors, so there was no fund for low-cost housing for sale to the people.

The Government now allocates annual social housing spending to localities; if implemented strictly, the supply will certainly increase. This is also a solution implemented by many countries.

"The solutions will impact and regulate the market, reducing the imbalance between supply and demand. It is important to strictly implement them. At the same time, it is necessary to make the market transparent, have a complete data system on real estate, know how many houses a person has and need to use regulatory tools such as real estate tax," Mr. Tuyen emphasized.

Tenants move furniture into an apartment building on Le Van Luong Street, Nha Be District, Ho Chi Minh City - Photo: TU TRUNG

Ho Chi Minh City proposes to establish a social housing savings fund

According to the investment project to build at least 1 million social housing apartments for low-income people and industrial park workers in the period of 2021 - 2030, Ho Chi Minh City is assigned the target of developing nearly 70,000 social housing units by 2030. Of which, in the period of 2021 - 2025, about 26,000 units will be built and in the period of 2026 - 2030, about 44,000 units will be built.

To have capital for implementation, many ways are needed, including mobilizing from the subjects who are eligible to buy social housing through salary deductions from these subjects, for which there is no mechanism for implementation.

Therefore, the research to establish a Social Housing Savings Fund (similar to Singapore's model) aims to maximize social resources, create awareness of financial savings for housing for those in need, and at the same time manage this group of people and specific project areas.

The Ho Chi Minh City People's Committee has proposed that the Government allow the establishment of a Social Housing Savings Fund in the locality. After receiving approval from the Government, the City People's Committee will coordinate with the Ministry of Finance and the Ministry of Construction to unify this operating model.

Refer to the Singapore model

Dr. Pham Phuong Nam, lecturer of the Faculty of Natural Resources and Environment of the Vietnam National University of Agriculture, said that the establishment of a national housing fund to develop low-cost housing in large cities is urgent to create conditions for low-income people to have a place to live. The fund development model can refer to the Central Provident Fund (CPF) of Singapore.

This fund was established in 1955, and is mainly used for the purpose of providing loans for social housing. When it was first established, the contribution rate was 10% of monthly salary (5% for each employee and employer). Currently, employers and low-income employees and civil servants must contribute their monthly salary to CPF at the rates of 17%/month and 20%/month, respectively. CPF provides loans up to 90% of the value of the house at very low interest rates and is paid in installments of 25-30 years.

In addition to CPF, the Singapore Housing and Development Board also provides mortgage loans to low-income homebuyers equivalent to 80% of the flat value for a maximum loan tenure of 55 years minus the borrower's age or 30 years, whichever comes first.

In addition, to make it possible for people to buy houses, the government needs to provide loans so that people only have to spend less than 20% of their monthly income to pay for houses. Private housing loans are provided by commercial banks and other financial institutions.

To regulate the housing market, control house price increases and limit speculation, the Singaporean Government has applied many effective measures such as reducing the maximum loan term for home purchases, limiting loan values, increasing taxes on real estate buyers...

The success of its housing market development policy has made Singapore one of the countries with the highest home ownership rate in the world (currently reaching over 90%).

"The State has a particularly important role. It is especially necessary to promptly issue specialized regulations for the development of affordable housing, while at the same time implementing, monitoring, and promptly resolving issues arising during the implementation process.

Private investors, understood as investors, also need to be encouraged to participate in developing this housing fund with specific support policies, especially financial and land policies," said Mr. Nam.

Source: https://tuoitre.vn/tay-choi-moi-tren-thi-truong-bat-dong-san-20250309082511783.htm