As soon as a low-cost housing project is launched, the rich rush to buy it. The poor, who should be supported, are left out.
To stabilize the market, it is necessary to strongly stop speculation and control the rich from buying and selling social housing and low-cost housing, real estate executives say.
Commenting about the proposal to restrict loans for second homes and beyond, proposed by the Ministry of Construction (MOC), Nguyen Vu Cao, Chair of Khang Land Board, said that controlling and curbing real estate prices are needed. However, tightening loans for second homes needs careful calculation.
He explained that limiting loans for second home purchases could reduce speculation. But on a market-wide scale, not all areas are overheating. Each locality has its specific remedies: some need cooling down, others need demand stimulation measures.
According to Cao, it’s important to identify specific markets and regions that need adjustment and tailor solutions accordingly.
“Credit tightening or taxation should not be applied across the board. Policies should be technically designed to target actual speculators. If not, the market will become imbalanced, liquidity will drop, and businesses’ competitiveness will suffer. For commercial banks, such interventions could also affect profitability and credit operations. So, if the policy isn’t well-researched, it could backfire,” he said.
Le Dinh Chung, CEO of SGO Homes, said home prices are rising in major cities like Hanoi and HCMC, while many other regions remain subdued.
“Some market segments, such as resort real estate, are very weak. If credit continues to tighten, recovery will be even more difficult. Emerging provincial markets may also be affected. So policies should be region- and target-specific. If we only look at Hanoi and HCMC and apply the policy nationwide, it won’t make sense,” Chung said.
Even in Hanoi, Chung pointed out that current planning is focused on relocating populations from the city center to new and satellite urban areas. Rigidly applying credit restrictions could hinder this strategy.
“That’s why thorough and cautious analysis is needed before implementation,” he said.
Preventing the wealthy from entering low-cost housing segment
Businesspeople believe that to control housing prices, the root issue – supply – must be addressed. Increasing the supply of appropriately priced housing is the long-term solution, not blanket credit restrictions.
Second-quarter reports showed that high-end apartments made up over 60 percent of total supply, while affordable units were nearly absent, only appearing in a few social housing projects.
In major cities like Hanoi and HCMC, affordable housing has practically vanished for years. This supply-demand mismatch has pushed prices up.
On recent sharp price rises, SGO Homes leader said the main causes are supply shortages, while taxes and inputs rise. Credit tightening, according to Chung, cannot reduce prices. The core solution remains increasing supply, especially social housing and suitable commercial (non-social) housing.
Chung added that while the government has policies to promote social housing, the affordable commercial segment should also be supported through incentives that encourage developer participation. This segment could serve as a second step up from social housing.
“For example, in Hanoi, where social housing is at VND20-30 million per sqm, suitable housing could be VND50-60 million per sqm. When supply expands meeting real demand, prices will gradually be adjusted reasonably,” Chung said.
Regarding the development of affordable housing, Cao from Khang Land stressed the need to control speculation.
“Low-income buyers can’t afford high-end housing, but affordable housing is still accessible to wealthy individuals who may buy for speculation or resale. The key is ensuring this segment is truly reserved for lower-income groups, and preventing the rich from entering to flip and drive prices up,” said Cao.
Nguyen The Diep, vice president of the Hanoi Real Estate Club, believes a national housing fund would be an effective tool to regulate the market on a macro level.
“With the current shortage of social and affordable housing, the government can use a ‘pre-order’ mechanism – placing contracts with developers, provided that quality and technical standards are clearly defined. If done well, it won’t take 10 years, but just three years to generate abundant supply,” Diep said.
He also emphasized that the most fundamental solution is to remove legal obstacles so projects can be approved more quickly.
“Tens of trillions of VND are currently ‘frozen’ in stalled projects nationwide. This represents a massive potential supply. Once regulatory hurdles are removed, many projects can be launched. Following the law of supply and demand, an abundant supply will naturally drive prices down,” he explained.
