Affordable apartments disappear in Hanoi, HCMC

According to the Vietnam Real Estate Market Research Institute (VARS IRE), the supply of housing has continuously declined but gradually recovered over the past two years. However, the product structure is increasingly imbalanced, with a severe shortage of segments affordable for the majority of people.

The institute reported that housing supply reached nearly 180,000 units in 2018, but dropped to just over 48,000 in 2022. The supply began to recover in 2023, reaching 65,000 new units in 2024. In the first half of 2025 alone, more than 51,000 were launched into the market.

However, product structure continues to diverge from demand. While real demand mainly focuses on the affordable (under VND25 million/sqm) and mid-range (VND25-50 million/sqm) segments, supply in these two segments dropped from 19 percent and 33 percent in 2019 to just 7 percent and 19 percent in 2024.

In Hanoi and HCMC, the two cities with the highest housing demand, these segments have nearly disappeared since 2023.

Before 2023, the supply of social housing was always in shortage and unable to meet real demand. But since the government launched its plan to build at least 1 million social housing units, the market has shown positive signs.

According to the Ministry of Construction, there are now 692 projects nationwide with more than 633,000 units. Among these, 146 projects have been completed, providing over 103,000 units.

In the first 7 months of this year alone, nearly 37,000 units have been completed, or 80 percent of last year's total and 7 times higher than in 2022. To date, 402 projects have been approved in principle, providing over 400,000 units, equivalent to nearly 60 percent of the 2030 target.

“The implementation pace will be maintained to achieve the goal of building 100,000 social housing units in 2025 and create momentum toward the 2030 target,” VARS IRE stated.

Speculation and illegal resale must be stopped

VARS IRE pointed out a paradox in the social housing market: apartments are in short supply but still unsold. While supply is low and demand is high, many projects are slow to sell due to procedural hurdles, poor location, or unsuitability for qualified buyers.

Another issue is land allocation. Many localities assign social housing projects to areas far from city centers, lacking schools, hospitals, and infrastructure, making them unattractive and failing to meet welfare goals.

Access to information is also limited. Marketing and sales costs for social housing projects are capped at 2 percent, making it difficult for developers to promote them widely. As a result, many eligible buyers are unaware of the offerings, causing localized oversupply while real demand remains unmet.

Additionally, speculation and illegal transfers persist in the market. Some buyers purchase units to resell, distorting market dynamics and depriving real buyers of opportunities to own a home.

A recent scientific research work about social housing development has also identified three persistent bottlenecks holding back the progress of social housing: land availability, administrative procedures, and financing.

In terms of procedures, many project approval regulations remain lengthy and cumbersome, increasing opportunity costs and discouraging developers.

As for financing, current interest rates for social housing loans are still inappropriate. Low-income workers already struggle with daily living expenses, and are now burdened by high principal and interest payments, making them hesitant to borrow. Weak demand has, in turn, reduced developer interest in this segment.

The current criteria for determining social housing buyers are not truly effective. Most policies prioritize extremely low-income groups, those who, even with support, are nearly incapable of saving enough to buy a home.

Meanwhile, the segment of workers with moderate savings and better repayment capacity are not being adequately prioritized.

In Hanoi, housing prices now range from VND60-100 million/sqm. With a monthly income of VND7-12 million, a young family would have to work for 30-50 years just to afford a small apartment. That is simply unrealistic.

VARS IRE recommends that state authorities seriously evaluate and discipline leaders in localities that have failed to meet their responsibilities in social housing development.

The institute also proposes a comprehensive review of all commercial housing and urban projects over 2ha in type I and special-grade cities to ensure the required 20 percent land allocation for social housing is enforced.

Moreover, an independent research unit should be assigned to survey demand, avoid supply-demand mismatch, and support a flexible, transparent approval mechanism that helps developers reach the right buyers.

Hong Khanh