The Blossoming Promise of Affordable Housing

On March 9, Kim Oanh Group held a signing ceremony and groundbreaking ceremony for the K-Home New City social housing project, located in the center of the new city of Binh Duong (Hoa Phu ward, Thu Dau Mot city, Binh Duong province).

Deploying a series of projects

With a scale of up to 26.69 hectares, K-Home New City is the first social housing project in Vietnam built to Singaporean standards and the first social housing project in Binh Duong developed according to the EDGE green building standard. K-Home New City provides the market with about 3,310 products, including K-Shophouse commercial houses, K-Home business social housing, K-Home terraced social housing, and K-Home high-rise apartments.

According to the Binh Duong Province Department of Construction, four social housing projects will be started in the province by 2025, including: Thang Long Social Housing, Hoang Thao My Apartment Area, Binh Chuan Social Housing, and Hoa Phu Social Housing. These social housing projects have a land area of 30 hectares and will construct about 5,362 apartments, equivalent to 356,120 square meters of floor space. In addition, at the beginning of February 2025, the province approved investment policies for seven social housing projects with a total of 9,240 apartments and a total investment capital of VND 8,468 billion.

Mr. Bui Minh Thanh, Vice Chairman of the Binh Duong Provincial People’s Committee, said that the province has implemented many social housing projects, helping thousands of workers have stable accommodation and peace of mind in their work and long-term attachment to the locality.

In Da Nang, the city aims to complete two social housing projects in 2025 at the Western Student Dormitory Area and the Western Expanded Area, with more than 700 units. The city has also completed the selection of investors for two social housing projects in the Nam Cau Cam Le Residential Area, with a scale of 1,955 apartments. Also, in 2025, Da Nang approved the investment policy and called for investment in five social housing projects, with a scale of about 3,300 apartments.

According to the targets assigned by the Government, by the beginning of 2025, Khanh Hoa Province had completed 3,364 social housing units, reaching 98.9% of the plan for the period of 2021 – 2025. It is expected that by the end of 2025, the Cam Nghia Ward social housing project (Cam Ranh City) will complete 1,142 units out of 3,565 units. Thus, in the period of 2021 – 2025, the province basically completed the targets according to the allocation plan.

In the period of 2025 – 2030, Lam Dong Province sets a target to complete 2,101 social housing units in Da Lat, Bao Loc, and Duc Trong districts. The province continues to call for investment in three social housing projects in Da Lat city with capital from non-state budget sources, with a total of 1,236 apartments.

On March 18, Mr. Vo Ngoc Hiep, Vice Chairman of the Lam Dong Provincial People’s Committee, issued a document agreeing on the allocation of social housing targets for the three localities in the period of 2025 – 2030, specifically: Duc Trong with 204 units in 2025; Bao Loc with 706 units in 2028, 2029, and 2030; and Da Lat with 1,191 units from 2025 to 2029. In addition, Lam Dong has 13 land fund locations planned for the development of social housing projects in Da Lat and Bao Loc.

The Ho Chi Minh City Department of Construction said that from 2021 to now, the city has completed and put into use five social housing projects with 2,377 units, one worker accommodation project (partially completed) with 368 units, and is currently constructing four projects with 2,874 units, expected to be completed by the end of 2025.

Prioritizing resources

To speed up progress, the Da Nang City Department of Construction said that the city always prioritizes resources for the investment and development of social housing…

In Quang Ngai, on March 19, the Provincial People’s Committee had a working session with the Vietnam General Confederation of Labor to agree on some contents related to investing in the construction of the Quang Ngai Social Housing Project for the trade union members in the province.

According to the Quang Ngai Provincial People’s Committee, the Vietnam General Confederation of Labor proposed that the Provincial People’s Committee allocate a part of the land fund of the Trade Union Facility Area Project in Quang Ngai (with an area of about 4.05 hectares in Tinh Phong commune, Son Tinh district) for investment in building social housing to meet the housing needs of workers and employees. The number of residents is expected to be about 2,500 people, and the total investment capital is about VND 640 billion, with the Vietnam General Confederation of Labor as the investor.

The Quang Ngai Provincial People’s Committee agreed with the proposals of the Vietnam General Confederation of Labor. Quang Ngai will carry out the necessary procedures to ensure the progress of site clearance and land handover before June 30.

Mr. Tran Phuoc Hien, Vice Chairman of the Quang Ngai Provincial People’s Committee, said that the construction of infrastructure around the project would be implemented soon to be completed before the social housing project is put into use. The province will report to the Provincial Party Committee Standing Committee to reply to the Vietnam General Confederation of Labor to soon implement the project. This is the first social housing project in the province, contributing to stabilizing the lives of many workers and employees, so Quang Ngai will create the most favorable conditions for the project to be implemented as scheduled.

Especially, on March 19, the Quang Ngai Provincial People’s Council of the 13th term, for the 2021 – 2026 term, passed the Resolution regulating the mechanism to support the implementation of investment projects to build social housing in the province.

Meanwhile, the People’s Committee of Nha Trang city (Khanh Hoa) is getting feedback from the community on the master plan of the Hung Phu II Social Housing Project (Vinh Hai ward). The project is deployed on a construction land area of 6,895 square meters, with a total of more than 1,000 apartments and a total investment of more than VND 1,000 billion.

According to Mr. Tran Van Chau, Director of the Khanh Hoa Provincial Department of Construction, the locality has achieved a rate of social housing projects that have been started and completed at 204% of the target, one of the highest rates in the country. The province will be more determined to synchronously implement solutions to develop social housing.

Positive signals from banks

Ngoc Hoang (from Thu Duc City, Ho Chi Minh City) said that he is in need of bank loans to buy an apartment with a budget of about VND 2 billion. However, in Ho Chi Minh City, there are very few commercial housing projects with apartments priced at about VND 2 billion, or there are not many options. Therefore, he has been looking into some social housing projects to see if the investors have linked with any banks for loans.

Mr. Nguyen Van Bach – Head of Credit Policy Division, Vietnam Bank for Agriculture and Rural Development (Agribank) – said that by the end of 2024, Agribank has disbursed about VND 1,000 billion for social housing loans.

Agribank has approached about 14-15 social housing projects and signed credit limit contracts worth thousands of billions of VND with investors, applying the interest rates for social housing loans announced by the State Bank every six months. At the same time, it requires all branches to monitor the approved projects to continue approaching and implementing social housing loans.

Mr. Le Ngoc Lam, General Director of the Bank for Investment and Development of Vietnam (BIDV), said that the bank has committed to finance thousands of billions of VND for social housing project investors. However, these projects need to be cleared of obstacles and prove their output. Then, the bank will quickly disburse, contributing to the development of the social housing program.

The leader of the Vietnam Industry and Trade Joint Stock Commercial Bank (VietinBank) said that in 2025, the bank continues to implement the social housing loan program with preferential interest rates from now until June 30 for project investors and home buyers, at 6.6%/year and 6.1%/year, respectively. After this period, every six months, VietinBank will announce the interest rate for the implementation period of the program. The preferential interest rate is applied within three years (for investors) and within five years (for home buyers) when buying houses in social housing projects. The scale of VietinBank’s social housing loan program is up to VND 30,000 billion, with an implementation period until December 31, 2030.

For loan packages for young people to buy houses, according to the State Bank, up to now, nine commercial banks have implemented this policy.

The Ho Chi Minh City Department of Construction said that the city government is directing and applying inter-sector coordination solutions to remove difficulties and obstacles for each project. In addition, the loosening of credit, along with real estate businesses having many solutions to proactively change their operating methods and restructure their investment portfolios, promises that the city’s real estate market in 2025 will be more vibrant and attract the attention of many investors, especially housing development investors.

Dr. Huynh Phuoc Nghia, University of Economics Ho Chi Minh City (UEH), analyzed that the preferential credit packages are commonly at the rates of 3.88%, 3.99%/year, 4.5%/year, or 5.5%/year in the first three months. There are also credit packages with a fixed preferential interest rate for 24-36 months or even five years. The implementation of credit packages for home-buying loans with initial interest rate incentives by banks will stimulate and boost the capital borrowing demand of the people, especially young people. However, it is necessary to note that most of the preferential credit packages are only applied in the initial period, and then the interest rate will float according to the market.

Proposing to pilot some specific policies

The Ministry of Construction is drafting a resolution of the National Assembly on piloting some mechanisms and policies for social housing development. The draft proposes mechanisms and policies such as the establishment of the National Social Housing Development Fund; the selection of investors for social housing projects without bidding, which is within the competence of the provincial People’s Committees; the Ministry of National Defense and the Ministry of Public Security selecting investors for projects to build housing for the armed forces; and the Vietnam General Confederation of Labor selecting investors for projects to build social housing with trade union capital for workers.

Social housing projects do not have to carry out procedures for approval of investment policies and appraisal of feasibility study reports by construction specialized agencies. Enterprises, cooperatives, and cooperative alliances in industrial parks are allowed to rent social housing from investors for their employees. The draft also stipulates the maximum profit rate that investors can enjoy for the area of social housing construction; mechanisms and policies for using the state budget and other legal capital sources to support site clearance, invest in the construction of technical infrastructure and social infrastructure for social housing development.

V.Duân

It must be fast, efficient, and determined

Mr. Tran Khanh Quang, General Director of Viet An Hoa Real Estate Company, said that achieving the target of 1 million social housing units is not difficult. It only requires the government to have a specific plan and clear policies, and each locality to be determined and “dare to think, dare to do” following the government’s directions.

Currently, some enterprises have participated in using 20% of the land fund of commercial housing projects to implement social housing projects, as well as large enterprises. For social housing, the most important factors are favorable land funds and diverse locations. The districts and towns on the outskirts of Ho Chi Minh City have a lot of land to implement social housing projects, so the city needs to soon implement and create a ready land fund. In particular, creating a quick legal mechanism is no less important. Because if the implementation is not quick, the cost will increase, reducing the profit of the enterprise and even causing losses.

More importantly, the government needs to consider expanding the scope of social housing to sell products more successfully, as the ultimate goal is to create a housing fund for people to buy for living. Therefore, it is necessary to divide 50% of social housing for prioritized objects and 50% for objects with housing needs, including young people who do not yet own a house. Young people may have money but not enough to buy high-end houses, so they need commercial houses at good prices like social housing. The transaction process should also be convenient, and they should be able to sell the house easily when they have the conditions to buy a better one. In that case, the social housing will be in high demand, instead of waiting for the “chicken and egg” problem to be solved.

S.Nhung