Severe supply-demand imbalance

Nguyen Thi Phuong (31, HCMC) and her fiancé recently decided to purchase a 37-sqm unit in a commercial housing project for VND1.6 billion. If the project stays on schedule, it will be handed over by late 2028. 

After proving their income, the bank granted a VND1 billion loan for 30 years, while the remaining VND600 million will be paid in installments to the developer. 

The project is nearly 25km away from Phuong’s workplace. However, she had no other choice because opportunities to buy social housing are almost non-existent, whereas the commercial project offered a suitable price.

"A year ago, my company informed employees to register for social housing, but there was no further information afterward. Even the location was not disclosed. I thought the project had been delayed, so I gave up on the idea," she shared.

Many others have also given up like Phuong. Recently, a social housing project on Ly Thuong Kiet Street (Dien Hong Ward, HCMC) received more than 12,000 applications for around 750 apartments available for sale and lease. That means roughly 16 people are competing for each apartment.

Social housing mainly emerges and becomes meaningful in urban areas, where housing demand is high, land prices and living costs far exceed those in rural areas, while industrialization, migration, and rapid population growth place heavy pressure on housing supply. However, the extremely high competition ratio has erased many residents’ hopes of owning social housing.

Commenting on the figures of 750 apartments and 12,000 applications, Tran Thi Hong Lien, Dean of the Faculty of Business Administration at the University of Economics and Law under Vietnam National University HCMC, said that only 6.25 percent of individuals or households in need of social housing are likely to have their demand met. The remaining 93.75 percent will have to continue waiting.

According to official information on social housing projects in the former HCMC, during the 2015-2020 period, projects that had received investment approval had a total potential supply of nearly 35,000 units. However, only a portion of these units was completed during that period. In the 2021-2024 period alone, the city completed only 2,745 social housing units.

In the former Ba Ria-Vung Tau area, only 445 social housing units were completed between 2020 and 2025. Meanwhile, 5,172 units are currently under construction and are expected to be completed by 2027.

Between 2021 and 2024, in the former Binh Duong, there were only 2,045 social housing units.

Meanwhile, after the administrative merger, HCMC now has around 4 million households. With about 25 percent estimated to have demand for and access to social housing, the city’s total demand is estimated at around 1 million units.

“The huge imbalance between supply and demand explains why residents have to compete fiercely for a chance to buy social housing. The problem is even more serious in central urban areas where the number of projects is extremely limited,” Lien told VietNamNet.

Cao Thi Thanh Huong from Savills Vietnam also said that the social housing supply in HCMC is in critical shortage. This issue has persisted for a long time. Consequently, the city needs to pay closer attention to legal issues and land funds dedicated to social housing construction on these sites to ensure correct positioning, timely handover, and accurate buyer targeting to solve the housing puzzle.

Barriers

After merging and becoming a megacity with over 14 million residents, social housing has become an even greater issue for HCMC. 

There are two main groups of developers: state-owned enterprises and private enterprises.

According to Lien, developers, regardless of motive or ownership type, face similar challenges when implementing social housing projects.

Firstly, investment procedures take a long time. Generally, developers spend 4-6 years completing procedural steps. Recently, the Government has requested to cut down 50 percent of procedures.

However, regulations still do not cover all stages for investors to commence construction, such as environmental impact assessments or fire safety approvals.

Secondly, project funding. Since the profit margin for social housing projects is capped at 10 percent, mobilizing capital becomes a major challenge. In particular, from late 2025 to the present, deposit and lending rates have continuously increased, far exceeding the aforementioned profit cap. 

Although the State Bank announced an initial credit package of VND120,000 billion and later increased to VND145,000 billion for social housing, access to this capital remains very limited for both developers and homebuyers. This is because banks must adhere to strict risk management regulations.

Tran Chung