A social housing project in the northern coastal city of Hải Phòng. VNA/VNS Photo

HÀ NỘI - The Government is studying the establishment of a National Housing Fund to boost the supply of affordable housing and address rising demand in major urban areas.

This model, which has proven successful in many developed countries, could be a game-changer for Việt Nam's housing sector, said economists and policymakers.

Rapid urbanisation in recent years has dramatically increased the population in cities—urban residents now account for nearly 40 per cent of the total population. Between 2019 and 2024, the annual growth rate in major cities averaged 3.06 per cent, 1.5 times higher than in rural areas. This surge has put immense pressure on housing development.

According to the Ministry of Construction, as of late 2024, over 70 million square metres of high-end housing remained vacant, primarily owned by investors. Although high-end and luxury properties comprise nearly 80 per cent of the market supply, affordable housing is in far greater demand, representing 70 per cent of market needs. Yet projects aimed at meeting this demand account for only about 20 per cent of the total housing supply, highlighting a severe imbalance.

Social housing, which benefits from various Government incentives for both developers and buyers, is also in critically short supply. While local authorities have theoretically allocated sufficient land to meet Government targets, actual implementation has been challenging. From 2021 to 2024, only 103 social housing projects—equivalent to 66,800 apartments—were completed, which is less than 7 per cent of the goal to build at least one million units by 2030.

Experts and policymakers have attributed these issues to complex legal frameworks, overlapping administrative procedures and a lack of initial Government funding for affordable housing projects. These obstacles have stalled thousands of projects, leading to a supply shortage and pushing housing prices rapidly up in the last several years.

Economist Dr Võ Trí Thành noted that despite vigorous efforts by the Government and businesses to revive the real estate market, affordable housing development has fallen short of expectations. Legal hurdles and financial constraints have stalled progress. While housing prices have been rising 15 to 20 per cent annually, average incomes have only increased 5 to 7 per cent, making homeownership an increasingly distant dream for many.

Thành said: “As urban housing prices continue to surge, homeownership is becoming unattainable for low- and middle-income earners. The National Housing Fund is a crucial policy tool that can help millions access affordable housing while correcting market imbalances. By stabilising supply and offering a variety of housing options, the fund will lay a strong foundation for long-term socio-economic development.”

Vice president of the Hanoi Real Estate Club Nguyễn Thế Điệp pointed out that housing development funds have been effective in many developed countries, expanding affordable housing for low- and middle-income groups under clear financial strategies and Government oversight.

“The National Housing Fund should support both social and affordable commercial housing. In our market-driven economy, it is essential to mobilise all economic sectors, particularly private enterprises, to drive housing development. The fund must be managed transparently, following international best practices, to ease supply pressures, maintain a healthy market and prevent speculative price inflation,” he said.

Professor Dr Đặng Hùng Võ suggested that although strong policies for social housing already exist, the National Housing Fund should operate independently to focus on expanding affordable housing options for a broader population.

“The fund should support businesses and individuals through targeted credit and tax policies, while the Government regulates to ensure fairness in a market-driven environment. By facilitating planning, land allocation and site clearance, and providing financial incentives for developers, we can accelerate project completion, reduce investment costs and ultimately lower housing prices,” he said. VNS