Illustrative image. Source: Int
According to Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokerage Association (VARS), the biggest barrier hindering the progress of social housing projects is the lack of attractive mechanisms for businesses. “Businesses survive on profits. Without ensuring a minimum profit, they cannot pursue these projects,” Dinh emphasized.
He also noted that setting ambitious targets without practical support policies has limited the number of implemented projects.
Le Huu Nghia, CEO of Le Thanh Company, pointed out that social housing projects are capped at a 10% profit margin, while compensation costs and loan interest rates rise as projects extend. Additionally, many projects are stalled due to land conversion procedures, site clearance delays, and insufficient investment capital. The complex approval process for social housing buyers further deters genuine applicants.
Pham Thi Mien, Vice Director of the Vietnam Real Estate Market Research Institute (VARS IRE), highlighted land allocation as the most significant bottleneck. Most urban development projects opt to pay fees rather than allocate 20% of their land for social housing. Many localities either fail to reserve dedicated land or allocate it in remote areas with poor infrastructure, deterring potential residents.
Legal procedures are another major hurdle. The lengthy process from policy approval to land clearance and construction permits increases opportunity costs for businesses. Preferential credit packages, such as the 120 trillion VND fund, remain inaccessible due to complex procedures and short grace periods.
The Ministry of Construction also noted that many localities show limited interest in social housing. Some allocate land far from city centers, neglect infrastructure investment, or select underqualified developers, delaying project implementation.
According to a VARS report, by Q3 2025, Vietnam recorded 692 social housing projects with over 633,500 units, achieving 59.6% of the 1 million-unit target by 2030. Of these, 165 projects (110,436 units) were completed, a 91.6% increase from 2024. Additionally, 147 projects (135,033 units) are underway, and 380 projects (388,000 units) have received investment approval.
In the first nine months of 2025, 43,681 units were completed. By year-end, an additional 39,245 units are expected, bringing the 2021–2025 total to nearly 150,000 units, or 35% of the plan.
Strong Policy Incentives Needed
Experts argue that to accelerate progress, mechanisms for land planning and allocation must align with local needs, potentially through independent surveys for objectivity.
Pham Thi Mien suggested refining policies to ensure land allocation and social housing development reflect actual demand. Professional surveys, conducted by independent market research firms, could provide a scientific basis for planning.
Challenges in controlling speculation and unauthorized transfers persist. Some buyers exploit social housing for profit rather than personal use, distorting the market and excluding genuine applicants.
Mien proposed that after the five-year ownership period, transfers should prioritize eligible buyers verified by authorities. If sold to non-eligible buyers, owners must repay received benefits.
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