In response to the Prime Minister’s directive to curb and reduce housing prices, the Ministry of Construction is drafting a government resolution proposing several policies to rein in irrational price hikes in the real estate sector.

What is the proposed model for the state-established real estate transaction and land use rights center?

In the draft resolution, the Ministry suggests enhancing transparency in property transactions through the establishment of a Real Estate and Land Use Rights Transaction Center under state management. This center would serve as a digital hub connecting all related agencies and organizations. Its roles include organizing, supervising, and verifying real estate transactions such as sales, transfers, and lease-purchase deals.

However, the draft does not clearly define the organizational model or operational method of the center. Is it meant to function purely as an information hub or as an actual real estate trading platform? Both models could serve as mechanisms to increase market transparency.

If the center is designed to supply data, it overlaps with the existing Real Estate Information Center under the Housing and Real Estate Market Management Agency of the Ministry of Construction, which already provides market information and data.

Currently, the Ministry of Construction is collaborating with the Ministry of Natural Resources and Environment and the Ministry of Public Security to implement a 90-day campaign to clean up land data. The goal is to eliminate data duplication and ensure mutual integration across agencies.

Once land and real estate databases are fully cleaned, synchronized, and publicly disclose real transaction data, they will become a powerful tool for the government to manage the real estate market in line with market principles. This will also enable effective regulatory intervention to prevent excessive price surges.

The center would also serve as a trusted source of official information for citizens, investors, and businesses, helping them make informed investment and transaction decisions, and avoid illegal or fraudulent deals and unreasonable pricing.

To build a comprehensive real estate data system, the Ministry of Construction should consider developing and operating a nationwide property information portal. This portal could integrate with other databases managed by agencies in charge of land, taxation, banking, and private real estate exchanges.

As local governments move toward a two-tier administrative system, the Ministry should guide provinces on establishing connections and sharing data between the proposed center and local public service centers. Data interconnectivity must be implemented immediately to address emerging practical issues in real time, ensuring timely and context-appropriate solutions.

If the Ministry proposes developing an online end-to-end real estate trading platform, it must first complete the information center framework. A trading platform can only function effectively if it is backed by a large, authoritative, and regularly updated property database.

Only when this integrated information infrastructure is in place can an online real estate exchange be connected to the electronic notarization system and banking network for cashless payments. It could also link to the tax and treasury systems for automated financial obligation calculation, tax payment, and registration fee collection - an effective method to prevent tax evasion in property transactions.

The platform would also connect and share land use data, zoning plans, and property ownership changes with the national real estate database. With nationwide referencing capabilities, it could build investor confidence, promote legal transactions, ensure full tax payments, and reduce risks.

Can home prices be stabilized through credit policies?

The draft resolution includes a policy to regulate housing loans. It proposes that financial institutions in Vietnam apply lending limits for homebuyers, excluding social housing. Specifically, loans for a second home must not exceed 50% of the purchase contract value, and loans for a third or subsequent home must not exceed 30%.

According to the Law on Real Estate Business and the Law on Credit Institutions, banks currently determine loan limits based on borrowers' creditworthiness and are required to comply with safety indicators set by the State Bank of Vietnam.

However, in practice, financial institutions lack tools to quickly and accurately verify a borrower's second or third home ownership on a national scale due to the absence of a centralized property ownership database.

Additionally, the draft policy offers incentives to developers by authorizing provincial authorities to allocate at least 20% of total planned commercial housing projects from 2026 to 2030 to build affordable housing. These projects would be awarded without auctions or bidding, in line with local housing development plans.

But is this an effective approach to promoting affordable commercial housing? The regulation could create inequality between commercial and social housing developers - especially those who invested before the resolution was issued and are preparing to release products to the market.

Recently, the National Assembly and the Government introduced multiple reforms to unlock the social housing segment. As a result, in 2026, numerous social housing projects will launch across various provinces for low-income buyers. However, the market may not fully absorb the supply, which is expected to be priced 70-90% lower than commercial housing.

Thus, introducing additional incentives for affordable commercial housing may duplicate existing policies. Fundamentally, commercial home prices are determined by market supply and demand, not administrative controls.

The credit debt trap: Buyers at risk, price bubbles ahead

Current laws allow for the pre-sale of unfinished properties in phases. Buyers may pay up to 30% of the contract value initially, 50% before property handover, and 95% before ownership certification. However, enforcement of these regulations remains weak.

Many major property developers partner with banks to offer loans covering up to 70-80% of the property value, often with 0% interest rates for the first one or two years.

This creates a psychological "low price trap." Buyers are misled into thinking they’re getting a deal, but these costs are often embedded in the sale price, inflating it by 5-10%. This pushes consumers into using credit packages and fuels price bubbles.

As of the end of July 2025, total outstanding credit in real estate reached over 4.1 quadrillion VND (approximately USD 168 billion), accounting for 24% of the banking sector’s total debt. Some banks, like Techcombank, report a real estate credit ratio exceeding 30%.

In large projects, developers often avoid direct sales, opting instead to work through real estate exchanges and intermediary companies within their ecosystems. Properties pass through multiple layers - F1, F2, F3 intermediaries - each applying high commissions of 10-20%.

With each layer, the price increases. Tactics include inflating listed prices far above market value, conducting fake internal transactions to manipulate market sentiment, hosting multiple sales phases with increasing prices, and promoting zoning rumors to attract buyers.

Sales campaigns are marketed with urgency, fostering a "buy now or miss out" mentality. Moreover, banks tend to appraise properties at inflated prices, enabling buyers to qualify for larger loans and boosting credit growth. This benefits banks in the short term but places long-term financial risk on buyers. If the market drops, the mortgaged assets lose value, leaving buyers in debt.

To sustainably control commercial property prices, authorities need policies that regulate supply prices before properties hit the market, preventing intermediaries from inflating values beyond their true worth.

Though the law mandates that developers publish project information on provincial construction department websites, enforcement is lacking. Updates on project progress, legal status, and pricing are rare, and no penalties exist for noncompliance.

A centralized information portal managed by the Ministry of Construction should require developers to disclose legal status, project timelines, product quality, transaction conditions, cost structure, and retail prices directly from the investor.

In cases of unusual price hikes, regulators must promptly inspect and supervise to prevent interest groups from exploiting policy loopholes.

The persistent dysfunction in Vietnam’s real estate market, driven by policy gaps, has led to profit manipulation worth trillions of VND. It is urgent that regulators implement effective mechanisms and penalties - particularly for overseeing future property transactions.

However, administrative overreach should be avoided. Instead, risk-prevention strategies must be developed to prevent subjective factors from triggering real estate bubbles that could ripple across other sectors and destabilize the broader economy.

Le Quang Minh