The Vietnam Real Estate Market Evaluation Research Institute (VARS IRE) has proposed issuing a national standard for rental housing and prioritizing the development of social housing for rent.

The Government has issued Decree 302, detailing the establishment of the National Housing Fund, a State financial fund operating outside the State budget, with legal status and a non-profit mandate.

The fund includes the Central Housing Fund, to be formed by the Government and managed by the Ministry of Construction (MOC), while provincial governments will establish and manage local housing funds.

The fund will be financed from multiple sources, including the State budget, the value of the land bank reserved for social housing infrastructure, and revenue from sales of public housing assets, from land-use right auctions, voluntary contributions from domestic and foreign entities, and other lawful sources.

The fund’s core objective is to create social housing for rent, and it is also permitted to purchase commercial residential housing to lease to civil servants, public employees, and workers.

The rental social housing model is not new globally. VARS IRE said it is a strategic housing solution aligned with international trends. 

For example, 80 percent of Singapore’s population lives in housing developed by HDB; South Korea maintains State-owned enterprises developing social housing; and Germany provides long-term subsidies for affordable housing with committed rentals below market levels for 15–25 years.

Experts beieve that developing a rental housing market is essential for Vietnam. Data from the institute shows that by the end of the third quarter 2025, condominium prices had risen sharply by 96.2 percent in Hanoi, 72.6 percent in Da Nang, and 56.9 percent in HCMC compared to 2019.

MOC reports that the average primary price in Hanoi has reached VND95 million per sqm, with more than 43 percent of new supply priced above VND120 million per sqm. In HCMC, primary prices average VND91 million per sqm, with some central projects reaching VND120-150 million per sqm.

Lack of affordable housing 

Meanwhile, average worker income is only around VND15 million per month. The house price-to-income ratio far exceeds affordability thresholds, making homeownership nearly impossible for many young families.

It is estimated that a young couple may need around 10 years of savings to accumulate a portion to buy a house, but during that time, house prices will increase faster than savings, leading to a situation where "savings can never catch up with house prices."

As a result, renting has become a more viable option for many. However, VARS IRE states that the rental housing market lacks professionalism and stability. Renting currently eases short-term financial pressure but does not meet long-term housing security needs.

Demand shifts from ownership to renting

As social housing prices rise beyond the reach of middle-income groups, VARS IRE believes that focusing on a rental-only model, without selling. will help ensure a stable supply, reduce speculation, and keep rental costs affordable and sustainable.

Currently, there are 692 social housing projects nationwide being implemented with about 633,000 units, but the number of completed units is just over one-quarter of the phase 1 target. 

The reasons are a lack of motivation for enterprises to develop social housing because of low profit margins, complex procedures, scarce clean land, and unstable preferential mechanisms.

Many experts have recommended changing the social housing development model towards a dominant role for the state, from policy planning and land allocation to capital and implementation organization.

VARS IRE suggests that to develop a sustainable rental housing market, public-private partnerships (PPP) should be promoted. Enterprises would build, and the state would buy or rent them back for management and operation.

The institute also recommends issuing a set of standards for rental housing, including limits on annual price increases, long-term rental contracts, and a transparent mechanism for adjusting incentive policies to encourage social participation in boosting rental housing construction.

In the long term, as housing supply improves, especially affordable housing and rental housing, the supply-demand balance in the market will gradually stabilize.

VARS IRE explained that a portion of the ownership demand will be replaced by rental demand. This will help reduce price pressure and create conditions for the real estate market to operate more transparently and sustainably. Simultaneously, it will open up genuine opportunities for stable residency for the vast majority of citizens.

The shift is expected to be a "reversal" that will help the real estate market reduce price pressure and open up stable residency opportunities for urban residents.

Hong Khanh