Advocating for the Retention of 4.8% Interest Rate on Social Housing Loans

Addressing the growing difficulty for low-income individuals in major urban areas to access housing, Mr. Lê Hoàng Châu highlighted that Decree 100 mandates buyers to borrow at an annual interest rate of 6.6%, which is prohibitively high. From July 2021 to July 2024, the Prime Minister repeatedly approved a rate of only 4.8% per year. However, starting August 2024, the rate increased to 6.6% per year. After numerous appeals, the Government issued Decree 261 on October 10, 2025, reducing the interest rate to 5.4%.

“In fact, we strongly advocate for maintaining the 4.8% rate. At the current 5.4%, if developers borrow from the Vietnam Bank for Social Policies, they face an interest rate of 120% of 5.4%, amounting to approximately 6.48%, which is very high. Meanwhile, commercial banks are lending to social housing developers like Nam Long at rates between 5.9% and 6.1%,” said Mr. Châu.

When discussing “affordable housing,” it can be categorized into two types: social housing and commercial housing priced appropriately for income levels. Mr. Lê Hoàng Châu raised the question: “What price is considered appropriate?”

Reflecting on 2013, when the Government issued Resolution 02, introducing a VND 30 trillion credit package, commercial housing priced up to VND 1.05 billion was eligible for the support package. Today, the appropriate price for commercial housing can be defined as below VND 3 billion.

For this type of housing, being commercial means developers do not require special mechanisms for land funds or taxes, but only need credit incentives—similar to the VND 145 trillion package the State Bank is implementing for social housing and old apartment renovations.

“We propose extending this package to include appropriately priced commercial housing, with interest rates of 5.9% to 6.1% that banks are currently applying, which is quite reasonable,” Mr. Châu emphasized.

Most importantly, there must be a credit policy for buyers with reasonable interest rates over 20 to 25 years. This would enable young people with partial finances, especially first-time homebuyers, to establish their own housing. Only then can we truly address the demand for income-appropriate housing.

To address this “thirst” for housing, in September 2025, during a meeting with Prime Minister Phạm Minh Chính and the Central Steering Committee on Housing Policy and the Real Estate Market, HOREA made the following proposals.

First, to reduce prices, supply must be increased. However, this increase should focus on affordable, income-appropriate housing.

Second, to boost the supply of affordable housing, obstacles and difficulties for stalled projects must be resolved. According to the Prime Minister, there are currently 2,890 projects facing issues that need to be addressed. Priority should be given to resolving these 2,890 projects.

Additionally, businesses must be given fair access to land through the implementation of National Assembly Resolution 171—a pilot program allowing the transfer of land use rights for residential and non-residential land to execute commercial housing projects.

According to Mr. Lê Hoàng Châu, in 2020, Ho Chi Minh City saw only 163 affordable housing units enter the market, accounting for 1%; the rest were mid-range and high-end units. By 2021, 2022, and 2023, only high-end units (70%) and mid-range units remained; affordable housing disappeared. By 2024, mid-range units vanished from new projects, leaving only high-end units (100%).

Supply has dwindled significantly. For instance, in 2017, businesses launched 43,000 units in Ho Chi Minh City, but by 2025, only 3,353 units were introduced in the first six months.

“Thus, we see a supply shortage. According to supply and demand principles, low supply and high demand lead to price increases. With such limited supply and overwhelming demand, residents struggle to access housing,” Mr. Châu noted.