Though social housing has quality equal to commercial housing, selling prices are no higher than VND17-18 million per sq m. 

But the market now has attention from big investors in Vietnam such as Vinhomes, Novaland, Him Lam, Sun Group, Bitexco and Hung Thinh, which have announced large-scale social housing products. 

For example, Vinhomes President Pham Thieu Hoa said the company plans to build 500,000 social housing products in the next five years, with selling prices of VND300-950 million/unit.

According to the Ministry of Construction (MOC), 301 social housing projects in urban areas and housing for workers with 156,000 apartments and a total area of 7.79 million sq m have been completed. 

Meanwhile, 401 projects are under execution with 455,000 apartments and a total area of 22.718 million sq m.

However, the development is slow compared with the requirements in the 2020 national housing development strategy, with a vision towards 2030. Under the strategy, Vietnam needs 12.5 million sq m of floor area.

It is expected that in 2021-2025, Vietnam will need 294,600 social housing apartments with total investment capital of VND220 trillion.

Nguyen Manh Khoi from the Ministry of Construction, said in 2020-2021, real estate demand fell sharply. Supply in 2021 dropped by 34 percent compared with 2020, while supply in 2020 fell by 50 percent compared with 2019. Almost no social housing project was licensed during that time, but this was the market segment with the highest demand.

Analysts say that social housing has low profits and point to the VND30 trillion credit package ending. Most real estate developers are only interested in commercial housing projects, thus leading to a social housing shortage.

Nevertheless, in 2008-2013, social housing products ran out, but these new projects have rekindled hopes.

Shorter process needed

Chair of the HCM City Real Estate Association (HOREA) Le Hoang Chau said many developers hesitated to invest in social housing because of complicated procedures, including procedures on selling prices, land use fees, compensation for site clearance, and lengthy investment procedures. 

Meanwhile, buyers find it difficult to access social housing because of many regulations and required conditions. The regulations place difficulties on both enterprises and low-income earners who need accommodations for their families.

The association has asked MOC to allow social housing developers to either reserve 20 percent of their land to build social housing within projects; or swap 20 percent of their land or housing for social housing.

Hung Thinh Group President Nguyen Dinh Trung said that the state and enterprises need to design comprehensive measures to have social housing.

Le Huu Nghia, director of Le Thanh Construction and Trade Company, complained about complex procedures, proposing that local authorities set up specific procedures for this kind of project to shorten the time for legal approval.

Experience shows that it is not difficult to develop social housing projects. Still, it will be prudent to wait and see if investors follow through on their commitments. 

Duy Anh