The New Income Rule and Its Impact: Why It’s Harder to Buy Social Housing

Missing Out on Home Ownership by a Mere $1000/month

According to Decree No. 100/2024/ND-CP, one of the requirements for citizens to be eligible to purchase social housing is to have an income not exceeding VND 15 million/month (for single individuals) and not exceeding VND 30 million/month (for married couples). This amount has increased by VND 4 million/person from the previous limit of VND 11 million/person/month.

However, many people have shared that it is still challenging to purchase social housing due to this income criterion.

Ms. Do Hien, a communications officer in Hanoi, shared that she and her husband have been married for five years but have not been able to buy a house. Recently, to settle down and start a family, they decided to borrow money from relatives to purchase a social housing unit in Long Bien district.

However, when applying, Ms. Hien realized that she did not meet the income requirement. Specifically, her salary is VND 15 million/month, and her husband’s is VND 16 million/month. Their combined income is VND 31 million/month, exceeding the limit by just VND 1 million.

Notably, while her husband’s income is VND 16 million, his take-home pay is only VND 12.5 million/month after various deductions according to the company’s regulations.

” In reality, with a combined income of VND 31 million/month, my husband and I only have about VND 29 million left, and we don’t have much to spare as the cost of living continues to rise. Rent already takes up VND 8 million/month, and with the children’s education and family expenses amounting to about VND 20 million, we are only left with VND 3-4 million each month. ”

I believe that an income of less than VND 30 million/month is not high, considering today’s housing prices and the cost of living. Therefore, the requirement of having an income below VND 15 million/month to be eligible for social housing is unrealistic and impractical, ” said Ms. Hien.

Similarly, Mr. and Mrs. Nguyen Duy Nghia, natives of Nam Dinh, were also disqualified from the very beginning due to their assessed high income. The couple works as laborers in the Bac Thang Long Industrial Park in Hanoi, with an average monthly income of about VND 24-25 million.

However, in 2024, due to the factory’s requirements, both had to work overtime, resulting in their income exceeding VND 30 million/month.

” The joy of earning a higher salary turned into a hurdle, preventing us from being certified as having an income below VND 30 million/month to qualify for social housing. Although this overtime work may not last long, for a family of four, our income is still not considered high. We desperately want to buy a home to stop renting, ” shared Mr. Nghia.

Based on his experience, Mr. Nghia frankly suggested that there should be more flexibility in income verification for families like his, as laborers’ incomes are often unstable and dependent on the businesses’ performance.

Mr. Nghia added that many of his colleagues also encountered unexpected issues that complicated their social housing purchases. For instance, some had employment contracts and social insurance but with gaps of 2-3 months between jobs, making it challenging to verify their income to meet the eligibility criteria.

Meanwhile, Mr. Tran Danh, also from Nam Dinh, qualified to buy social housing with a combined income of less than VND 30 million/month with his wife, but he still hesitated after seeking advice.

Mr. Danh works in an industrial park where a social housing project is being built for employees, with a price of VND 25 million/sq m. The apartment he wanted to buy was 67 sq m with two bedrooms, adequate for his family, and cost about VND 1.7 billion. Initially, he thought he would pay 30% and take out a loan for the remaining 70% at a preferential interest rate of about 7%/year, expecting the total monthly payment for principal and interest to be less than VND 10 million.

However, he was shocked to learn from a bank employee that the monthly payment would be VND 14 million.

” My family of four has a monthly income of about VND 28 million. With rent and other expenses amounting to nearly VND 20 million/month, we cannot afford this monthly payment of principal and interest, ” Mr. Danh shared.

According to Mr. Danh, with the cost of living in major cities like Hanoi and Ho Chi Minh City, an income of less than VND 30 million/month is insufficient to cover daily expenses and repay social housing loans.

Recently, in a contribution to the draft resolution of the National Assembly on piloting several mechanisms and policies for social housing development, Mr. Ta Van Ha (Quang Nam) – Deputy Head of the Committee for Culture and Society – stated that social housing prices are still high compared to the income of laborers.

” With a salary of less than VND 15 million/month, it is challenging to afford social housing at VND 25 million/sq m. Even the rental price of VND 6 million/month is considered high for young people with low, unstable incomes, ” Mr. Ha pointed out.

Income Criteria Should be Region-Specific

According to Mr. Giang Anh Tuan, Director of Tuan Anh Real Estate Exchange Floor, the income limit of VND 15 million/month should not be a rigid criterion and should consider other factors, especially the cost of living differences between regions.

In non-urban areas with lower living costs, an income of less than VND 15 million/month is appropriate. However, in urban and industrial areas with a high concentration of laborers and higher living expenses, an income of less than VND 15 million/month cannot be considered high.

” I suggest having separate income criteria for different regions. For Hanoi and Ho Chi Minh City, the income limit could be VND 20 million/person/month, while for other areas, it could remain at VND 15 million/person/month, ” proposed Mr. Tuan.

Mr. Tuan added that just as Vietnam has set different minimum wage levels for four regions, the income criteria for social housing eligibility should also be region-specific.

Mr. Nguyen Van Dinh, Vice President of the Vietnam Real Estate Association, agreed that commercial apartment prices in major cities like Hanoi and Ho Chi Minh City are beyond the reach of many families, especially young ones.

Currently, there are two credit packages for individuals under 35 years old to buy social housing, but the supply of social housing is limited. Meanwhile, many families face challenges because they are not rich enough to buy commercial housing and not poor enough to qualify for social housing under the current regulations.

” We must immediately adjust the income criteria to expand the beneficiary group for social housing and align with the economic conditions in major cities, ” emphasized Mr. Dinh.