The Capital’s Affordable Housing Crisis: Hanoi’s Sky-High Prices for Aging Social Housing

Social Housing: Affordable Quality Living for All

While the real estate market in Hanoi has shown signs of cooling down, prices continue to soar, especially for social housing projects that have met the conditions for transfer.

A survey in late 2017 revealed that social housing units in the 987 Tam Trinh, Yen So, Hoang Mai project were selling for approximately VND 14.2 million per square meter (excluding VAT), while commercial apartments in the same development were priced at around VND 18 million per square meter.

Fast forward to the present, after 7 years, these social housing and commercial units in the 987 Tam Trinh project are now listed for VND 50-53 million per square meter, nearly triple the original asking price.

Over the span of 7 years, the price of social housing units in the 987 Tam Trinh project, Yen So, Hoang Mai, has nearly tripled.

Similarly, the Rice City – Tay Nam Linh Dam social housing project in Hoang Liet ward, Hoang Mai district, which was launched in 2015 at a price of nearly VND 15 million per square meter, now boasts asking prices of VND 54-59 million per square meter after 9 years.

As evidence, a 67-square-meter social housing unit in the Rice City Linh Dam development was priced at about VND 1 billion in 2015; today, a unit of similar size in the same project is listed for VND 4 billion.

Meanwhile, at the CT1 Ngo Thi Nhậm social housing project in Ha Dong district – Hanoi’s first social housing development, prices have also seen significant movement. Specifically, when these units were first offered in 2010, they were priced at VND 8.8 million per square meter. Today, they are valued at VND 46-50 million per square meter, more than five times the original price.

According to Mr. Tran Dinh Quan, Sales Director of the Evergreen Bac Giang and Evergreen Trang Due social housing projects in Hai Phong, the selling price of social housing units after 5 years is market-driven. Units that are sold for a good price reflect the positive aspects of the project, including quality, favorable location, and efficient management and operations.

Additionally, the ability to sell social housing units at a premium after 5 years indicates a shortage of projects that cater to the needs of middle- and lower-income individuals, especially in major cities like Hanoi and Ho Chi Minh City.

Meanwhile, research data from the Vietnam Real Estate Brokers Association (VARS) indicates that housing prices are continuously setting new highs, far outpacing the income growth of the majority of the population.

Notably, mid-range apartments are becoming increasingly scarce, as the market is dominated by luxury and high-end segments, with over 80% of new apartment supply in Hanoi and Ho Chi Minh City in 2024 priced at VND 50 million or higher per square meter.

Challenges in Accessing Social Housing Loans

Regarding social housing projects, the Ministry of Construction has recently pointed out several localities with significant demand for this segment, including Hanoi. By 2025, the city plans to complete only 3 projects, providing 1,700 apartments, which equates to just 9% of the city’s needs.

In reality, in addition to the shortage of supply, developers and homebuyers currently face challenges in accessing social housing loan packages.

On this matter, Mr. Tran Dinh Quan shared that accessing loans for social housing projects has become somewhat easier than before, but there are still many shortcomings. For homebuyers, the Vietnam Social Policy Bank has recently reduced interest rates to 4.8-6.6% (including previously disbursed loans), but there is a lack of capital allocation for disbursement, causing difficulties for customers.

Meanwhile, the VND 120,000 billion credit package (for social housing, worker housing, and renovation projects) has become more accessible to developers and homebuyers with the participation of four joint-stock commercial banks. However, some customers still struggle to prove their income to qualify for the loans.

Mr. Tran Dinh Quan also suggested that to bring the VND 120,000 billion social housing credit package closer to developers and homebuyers, it is necessary to extend the interest rate support period for both parties. Simultaneously, there should be more flexibility in disbursement conditions and loan procedures, as many businesses and individuals are still recovering from the economic fallout of the COVID-19 pandemic.

Previously, at a press conference on the banking sector’s performance in the first half of the year and its tasks for the second half, Ms. Ha Thu Giang, Director of the Credit Department for Economic Industries (State Bank of Vietnam), shared that for the VND 120,000 billion package, 34 out of 63 provinces have announced project lists, submitting 78 projects. To date, state-owned commercial banks have disbursed VND 1,344 billion, including VND 1,295 billion for developers and VND 49 billion for homebuyers.

However, Ms. Ha Thu Giang also expressed that due to limited housing supply, some localities have not announced project lists. Furthermore, out of the 78 announced projects, many do not require loans, or they face legal difficulties related to land use conversion, or they are still in the early stages of construction, contractor selection, or land clearance… These factors hinder the implementation of the VND 120,000 billion credit package.