Binh spoke at the forum “Developing the real estate market - a boost for double-digit GDP growth” organized by Xay Dung newspaper on September 26.

Binh said several factors have driven the sharp rise in housing prices in Hanoi and HCMC since early 2023, including a shortage of commercial housing supply over the past 4-5 years.

Data from the Vietnam Association of Real Estate Market Research and Appraisal (VARS IRE) shows an increasingly imbalanced product structure. Notably, in Hanoi and HCMC, the two areas with the highest housing demand, affordable housing has been nearly absent since 2023.

Binh explained that under current regulations, developers can only build housing projects if they have residential land-use rights. This requirement has stalled many projects; some developers are unable to proceed due to the lack of residential land.

In addition, the 2024 land law requires land prices to be determined based on market principles, which has pushed land costs even higher.

Developers also complained about slow administrative procedures. At Cienco 5 Land, some projects took 5-10 years just to complete land allocation, pricing, and payment processes. During this long waiting period, financial costs can increase due to inflation, further pushing up the final price of housing.

Binh emphasized that developers are not eager to raise prices, as high-end housing only serves a small segment, is harder to sell, and carries higher risk. However, soaring input costs, particularly land use fees, have discouraged them from developing low-cost housing.

Speaking at the forum, Dr Le Xuan Nghia, member of the national financial and monetary policy advisory council, said that one major bottleneck in the real estate market today is the capital cost.

Bank credit remains the primary funding channel, accounting for about 25 percent of the entire credit system. Of this, 40 percent goes to real estate investment, while the remaining 60 percent supports homebuyers. However, relying solely on banks creates systemic risks and undermines long-term sustainability.

Corporate bonds from real estate companies currently make up 20-30 percent of the corporate bond market, but they only meet about 7 percent of actual capital needs. Moreover, these bonds are heavily concentrated among a few large corporations, and a lack of transparency could pose broader risks to the financial system.

Tran Dinh Thien, member of the PM’s advisory group and former director of the Vietnam Institute of Economics, argued that for the market to develop sustainably, structural issues must be addressed.

“Project stagnation is mostly caused by legal bottlenecks. This is the bottleneck of all bottlenecks,” Thien said.

From a regulatory standpoint, Tong Thi Hanh, director of the Housing and Real Estate Market Management Agency under the Ministry of Construction (MOC), acknowledged that the market still faces many obstacles. The key to solving them lies in institutional reform, i.e., addressing legal issues wherever they arise.

Regarding the national housing fund, Hanh noted that when established, it will operate on a non-profit rental model. This allows for efficient land use, conserves resources, and targets those with genuine housing needs. After the rental period, tenants may be allowed to sublease the property if they qualify to purchase a home.

“In the long run, once a stable housing fund is in place, we will no longer be burdened by the shortage of land for social housing,” Hanh said.

She also revealed that the MOC is working with the Ministry of Public Security and Viettel Group to develop a national real estate information system. The goal is to monitor housing supply and transactions, and correct imbalances in product structure.

According to Hanh, the center will serve as a central hub for information retrieval, transactions, certifications, and even property identification down to the individual asset level.

According to the Hanoi Department of Construction, from the beginning of this year, 33 future real estate projects in the city have met the criteria to raise funds from buyers, supplying the market with 30,364 units. Of these, more than 80 percent, or 24,556 units, are condominiums.

Compared to 2024, after just three quarters, the new supply has already reached about 80 percent of last year’s total. Statistics from Savills show that Hanoi added around 30,900 apartments in 2024.

Despite this recovery in supply, average apartment prices in Hanoi continue to climb, as most developers focus on high-end and luxury segments.

The Hanoi condo market remains locked in a price race, with each new project priced higher than the last. A growing number of units are hitting VND100 million per sqm, with some even doubling or tripling that level.

Hong Khanh