Why Are Housing Prices Soaring?
Over the past nine months, according to the Ministry of Construction, apartment prices in Hanoi and Ho Chi Minh City have remained high, with an upward trend compared to the same period last year.
In Hanoi, the average primary price reached 70-80 million VND/m², a 5.6% increase from Q1/2025 and a 33% surge compared to the same period in 2024. Some luxury projects recorded extremely high prices, ranging from 150 to 300 million VND/m².
In Ho Chi Minh City, the average primary price stood at around 75 million VND/m², stable since the beginning of the year but up 36% year-on-year. Several high-end projects priced at 150 million VND/m² or higher.
What’s driving the relentless rise in apartment prices, and how can we reduce housing costs?
 Various solutions proposed to lower housing prices. Photo: Hoàng Hà |
Speaking to reporters, Mr. Phạm Đức Toản, CEO of EZ Real Estate Investment and Development JSC (EZ Property), cited multiple factors behind the rising housing prices. Developers face numerous expenses when implementing a housing project, from planning and bidding to land clearance, infrastructure construction, land use fees, and meeting business eligibility criteria.
“Cumbersome legal procedures and soaring land use fees, especially in localities applying market rates, have inflated costs, forcing developers to sell at higher prices,” said Mr. Toản.
However, business leaders are optimistic that National Assembly Resolution 201 on piloting special mechanisms for social housing development, Resolution 171 on piloting commercial housing projects through land use rights agreements, and the upcoming Land Law amendments will significantly ease market challenges.
According to Mr. Toản, reducing housing prices requires increasing supply, diversifying products and price points, and streamlining legal frameworks to facilitate project implementation. Notably, policies should prioritize developing social housing and worker accommodations.
When Will Prices Naturally Decline?
Real estate expert Trần Khánh Quang attributes the current price hike to multiple factors, primarily a supply shortage. The market is imbalanced, with a mismatch between investment-focused products and actual housing demand.
Additionally, high land use fees deter individual investors from subdividing land and constructing affordable housing, causing the low-cost townhouse segment to virtually disappear.
Mr. Quang suggests that fundamentally reducing prices requires boosting supply and simplifying construction permit procedures. For stalled projects, relevant ministries should collaborate to resolve issues decisively.
He recommends the government focus on expanding social housing and affordable homes while creating policy incentives for developers. Once supply meets demand, prices will naturally decrease.
Regarding property taxation, Mr. Quang warns that in a supply-constrained, high-demand market, such measures would burden consumers, further inflating prices. Thus, this solution is currently premature.
At a recent forum, Dr. Cấn Văn Lực, BIDV’s Chief Economist and a member of the Prime Minister’s Policy Advisory Council, suggested that increasing affordable housing supply through a National Housing Fund could ease prices. Resolving legal bottlenecks for nearly 3,000 stalled projects worth 6,000 trillion VND would also stimulate economic growth and cool the market.
He emphasized the need to penalize developers and brokers artificially inflating prices and implement anti-speculation tax policies. Internationally, three tax types—transaction, second-home, and inheritance taxes—should be considered, with a phased rollout based on transparent, synchronized data systems, requiring 1-2 years of preparation.
Nguyễn Lê
– 19:30 30/09/2025
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