Housing prices have risen sharply over a short time. Ten years ago, social housing prices in Hanoi were less than VND15 million/sq m. However, since 2023, prices for affordable housing have been steadily climbing.

In 2023, the NHS Trung Van social housing project in TrungV an Ward, Nam Tu Liem District, was priced at over VND19.5 million/sq m (including VAT).

A social housing project in Ha Dinh, Tan Trieu Commune, Thanh Tri District, still under construction and not yet accepting applications, has a tentative selling price of VND25 million/sq m.

Buyers were even more surprised when the Rice City Long Chau social housing project in Long Bien District announced a tentative price of VND26-27 million/sq m.

At these prices, the smallest 32 sq m unit in the project would cost around VND864 million, while the largest 77 sq m unit would be approximately VND2.08 billion.

Having saved about VND400 million after decades of working in Hanoi, Thu Trang and her husband are deeply worried as social housing projects remain scarce while prices continue to rise.

“Our combined income is about VND25 million per month. After deducting VND3 million for rent, our child’s school fees, and living expenses, we’re unsure if we could manage monthly principal and interest payments if we borrow around VND1 billion to buy a social housing unit,” Trang said.

Why is social housing becoming more expensive?

Nguyen Anh Que, Chair of G6 Group, told VietNamNet that rising social housing prices stem from increased construction costs, including materials and labor, over recent years.

Additionally, it is due to changes in regulations in Decree 100/2024 compared to Decree 100/2015 in the calculation of social housing profits and land tax calculation for 20 percent of commercial area in social housing projects.

Under Decree 100/2015, the total profit of both the commercial and social housing parts in a real estate project must not be higher than 10 percent, while 20 percent of the commercial housing part is exempted from land use fees.

Currently, applying Decree 100/2024, the social housing part still can have profit of 10 percent, but the 20 percent profit in the commercial part is accounted for separately, and land use fees must be paid.

For example, the NHS Trung Van social housing project has an approved price of VND19.5 million/sq m if applied Decree 100/2015, but would have the price of VND27 million/sq m if applied Decree 100/2024.

“At the Ha Dinh social housing project, the social housing price is expected to be VND25 million/sq m, while the commercial units could sell at market rates, potentially reaching VND70 million/sq m,” Que explained.

Also, according to the G6 Group leader, the developers building social housing for factory workers or in rural areas, with social housing prices below VND15 million/sq m and commercial units under VND20 million/sq m, could earn only modest profits.

Meanwhile, in major cities like Hanoi, HCM City, Hai Phong, and Da Nang, social housing prices can be approved up to VND27 million/sq m, and the 20 percent commercial units can fetch nearly VND100 million/sq m, yielding significant profits for developers.

Que proposed combining profits from social housing and the 20 percent commercial units as before, raising the profit margin for social housing developers to 13 percent, and exempting the commercial part from land use taxes. He also suggested the government consider removing the 5 percent VAT on social housing.

“If these proposals are adopted, the social housing project at Nguyen Xien could be price at below VND20 million/sq m, and the Rice City Long Chau project below VND21 million/sq m,” Que said.

The Ministry of Construction (MOC) has recently submitted a draft decree to the Government detailing provisions and measures to implement the NA’s Resolution 201/2025, which pilots special mechanisms and policies for social housing development, mentioning the establishment of a national housing fund and local housing funds.

The national fund operates as a state-owned enterprise with 100 percent state capital. Its financial management complies with legal regulations corresponding to its operational model.

For local housing funds, based on local conditions, the chairs of provincial People’s Committee decide the organizational structure, management apparatus, and operating agency of the fund.

The draft proposes that the central housing fund’s initial charter capital, provided by the central budget, be at least VND5,000 billion upon establishment, increasing to a minimum of VND10,000 billion within three years from its founding date.

The Ministry of Construction reported that 1,356 locations nationwide, covering 9,766 acres, have been designated for social housing. As many as 276 social housing projects have been completed or are under construction, totaling 216,374 units. 

Hong Khanh