Real Estate

Quenching the Affordable Housing Thirst: What’s a Reasonable Price Point?

Elevating the development of housing segments tailored to the average income of citizens is a key directive from the Prime Minister aimed at curbing rising property prices. The critical question remains: what price point is considered truly affordable?

Administrator

18 October, 2025

Developing Two Affordable Housing Types

At the seminar titled “Quenching the Thirst for Affordable Housing and Solutions to Attract Residents to New Urban Areas” on the afternoon of October 17, Mr. Lê Hoàng Châu, Chairman of the Ho Chi Minh City Real Estate Association, stated that affordable housing can be categorized into two types.

The first is social housing, the segment with the lowest prices. However, a recently announced social housing project in Hanoi has a relatively high price, reaching 29.5 million VND per square meter. At this rate, a 70-square-meter apartment would cost nearly 2.1 billion VND. With a loan at a 4.8% interest rate over 25 years, buyers could still afford it.

The second type is commercial housing priced appropriately for income levels. According to Mr. Châu, policies are urgently needed to develop this segment.

“When the Housing Law is revised in 2026, we will propose mechanisms to support buyers of appropriately priced commercial housing,” Mr. Châu said.

Experts suggest that appropriately priced commercial housing should range between 2-3 billion VND, accompanied by preferential loan packages. Photo: H.A

What price is considered appropriate? According to Mr. Châu, in 2013, when the Government issued Resolution 02 and launched a 30 trillion VND credit package, commercial housing priced at 1.05 billion VND or less qualified for loans. Today, the appropriate price for commercial housing is considered to be under 3 billion VND.

“As commercial housing, developers do not require special mechanisms for land funds or taxes, but only need credit incentives, similar to the 145 trillion VND package the State Bank is implementing for social housing and old apartment renovations. This package should be extended to appropriately priced commercial housing, with interest rates of 5.9-6.1% applied by banks deemed reasonable,” Mr. Châu explained.

However, he emphasized that the most critical factor is providing credit policies for buyers with reasonable interest rates over 20-25 years. With some savings, especially for first-time buyers, young people can establish their own homes. Only then can we truly address the shortage of income-appropriate housing.

From a business perspective, Mr. Nguyễn Thanh Quyền, CEO of Thắng Lợi Group, believes the outlook for affordable housing development is very optimistic.

“In the next 10 years (by 2035), the market will witness a boom in both affordable housing and luxury housing segments,” Mr. Quyền stated.

Regarding affordable housing, the two main segments are low-cost commercial housing and social housing. Mr. Quyền predicts more businesses will enter this segment in the future, as the three major bottlenecks previously hindering social housing have been largely resolved.

“First, input costs are now clearer and more transparent. Second, the profit cap has been raised from 10% to 13%, with expectations for more flexible adjustments. Third, the eligibility for purchasing, renting, or lease-purchasing social housing has been significantly expanded, increasing the number of actual beneficiaries,” Mr. Quyền explained.

Solutions for Affordable Real Estate

To develop the affordable housing segment, according to Mr. Nguyễn Trung Vũ, Chairman of Cen Land’s Board of Directors, the State must reduce land use fees, possibly applying this to urban areas farther from city centers.

“If land use fees are seen as a short-term revenue source, property prices will soar, making it difficult for businesses to sell and develop sustainably. They should be considered a long-term revenue source to help businesses grow,” Mr. Vũ suggested.

Additionally, policies must support genuine buyers and deter speculators.

Emphasizing that homes are for living, not speculation, Cen Land’s leadership advocates establishing the principle of “building homes for living” and “not allowing construction unless residents can be attracted.”

Regarding affordable housing, Mr. Vũ suggests a price of 2 billion VND, enabling young people to purchase and pay in installments over many years.

Meanwhile, Mr. Lê Hoàng Châu believes increasing the supply of appropriately priced housing requires resolving bottlenecks for nearly 2,900 stalled projects.

Additionally, supply can be boosted through National Assembly Resolution 171, which pilots allowing the transfer of residential land use rights and other land types for commercial housing projects. Streamlining administrative procedures is essential for this.

Nguyễn Lê

– 06:00 18/10/2025