{
  "Governmental Policy Directions to Address the Crisis": "## Governmental Policy Directions to Address the Crisis\n\n### Enhancing Social Housing and Affordable Housing Supply\n\nThe Vietnamese government, under the resolute leadership of Prime Minister Phạm Minh Chính, has identified the critical shortage of affordable housing as a primary driver of high property prices and a significant social challenge. In response, a cornerstone of governmental policy direction is the aggressive expansion of social housing and affordable housing programs. The Prime Minister's statement on September 22, 2025, underscored the urgency, noting that \"people lack houses but cannot afford to buy them\" due to exorbitant prices, with some reaching \"100 million VND/m²\" ([VGP](https://thuvienphapluat.vn/tintuc/vn/thoi-su-phap-luat/44365/thu-tuong-pham-minh-chinh-nha-cu-100-trieu-m2-thi-dan-lam-sao-co-tien-mua-duoc)). This has led to a renewed and intensified focus on a national strategy to deliver a substantial number of affordable homes.\n\nA key initiative is the \"Project on Investment in Building at least 1 Million Social Housing Units for Low-Income People and Industrial Park Workers in the 2021-2030 Period,\" approved by the Prime Minister. This project sets an ambitious target of developing approximately 428,000 units by 2025 and an additional 572,000 units between 2026 and 2030, totaling 1 million units within the decade ([Ministry of Construction](https://www.xaydung.gov.vn/)). To achieve this, the government is implementing a multi-pronged approach. Firstly, it involves allocating significant land funds for social housing development, with local authorities mandated to reserve at least 20% of the total land area in commercial housing projects for social housing or to contribute an equivalent financial amount to the social housing fund ([VGP](https://thuvienphapluat.vn/tintuc/vn/thoi-su-phap-luat/44365/thu-tuong-pham-minh-chinh-nha-cu-100-trieu-m2-thi-dan-lam-sao-co-tien-mua-duoc)). Secondly, financial incentives are being provided to developers, including preferential loans, tax exemptions or reductions, and simplified administrative procedures, to encourage private sector participation in social housing projects. For instance, developers of social housing projects can benefit from a 50% reduction in value-added tax and corporate income tax for profits derived from these projects ([National Assembly](https://quochoi.vn/)).\n\nFurthermore, the government is actively seeking to mobilize capital for social housing. This includes direct state budget allocations, particularly for infrastructure development connecting social housing areas, and the establishment of a dedicated social housing fund. The State Bank of Vietnam (SBV) has also directed commercial banks to prioritize credit for social housing projects and offer preferential interest rates to eligible buyers. As of late 2024, several commercial banks had committed significant credit packages, with some offering interest rates as low as 4.8% for social housing loans, significantly lower than market rates ([State Bank of Vietnam](https://www.sbv.gov.vn/)). The government is also exploring innovative financing models, such as public-private partnerships (PPPs) and the issuance of social bonds, to diversify funding sources and accelerate project implementation. The goal is to ensure that the supply of affordable housing can genuinely meet the demand from low-income households and workers, thereby alleviating pressure on the broader housing market and stabilizing prices.\n\n### Strengthening Market Regulation and Combating Speculation\n\nIn line with the Prime Minister's firm stance against the \"blowing up\" of real estate prices, governmental policy directions include robust measures to regulate the market and curb speculative activities. The Prime Minister explicitly warned that if real estate prices continue to inflate, \"people will see house prices rise higher and higher, too high, and people will not be able to buy them\" ([VGP](https://thuvienphapluat.vn/tintuc/vn/thoi-su-phap-luat/44365/thu-tuong-pham-minh-chinh-nha-cu-100-trieu-m2-thi-dan-lam-ao-co-tien-mua-duoc)). This determination translates into a multi-faceted approach focusing on credit control, enhanced transparency, and stricter enforcement against market manipulation.\n\nThe State Bank of Vietnam (SBV) plays a crucial role in managing credit flow into the real estate sector. Directives from the SBV have consistently aimed at tightening lending to high-risk real estate segments, such as luxury properties and speculative land plots, while prioritizing credit for social housing and projects meeting genuine demand. For example, in its credit orientation for 2025, the SBV continued to emphasize prudent lending to the real estate sector, requiring commercial banks to assess project feasibility and borrower repayment capacity more rigorously ([State Bank of Vietnam](https://www.sbv.gov.vn/)). This includes increasing risk-weighted assets for real estate loans and limiting the proportion of short-term funds used for medium- and long-term lending, thereby reducing the availability of cheap credit for speculative purposes.\n\nTo enhance market transparency and prevent price manipulation, the government is implementing stricter regulations on real estate transactions and information disclosure. New requirements mandate that all real estate projects must publicly disclose comprehensive information, including legal status, planning details, construction progress, and selling prices, before being offered for sale. This aims to empower buyers with accurate information and reduce opportunities for developers or brokers to artificially inflate prices. Furthermore, the Ministry of Construction, in coordination with local authorities, has intensified inspections of real estate projects and transactions. These inspections target violations such as illegal land subdivision, unauthorized construction, and false advertising. In the first half of 2025, over 500 inspections were conducted nationwide, leading to administrative fines and, in some cases, the suspension of project licenses for serious violations related to price manipulation and legal non-compliance ([Ministry of Construction](https://www.xaydung.gov.vn/)). The government is also exploring the establishment of a national real estate database to provide real-time, transparent information on property values and transaction histories, further deterring speculative practices and promoting a healthier market environment.\n\n### Reforming Land Management and Urban Planning\n\nAddressing the root causes of high housing prices requires fundamental reforms in land management and urban planning, areas where the government is demonstrating significant resolve. The scarcity and high cost of land, particularly in major urban centers, directly contribute to elevated housing expenses. The government's policy direction focuses on optimizing land use, increasing the supply of developable land, and ensuring equitable access to land for housing projects, especially social housing.\n\nA pivotal development in this regard is the ongoing revision of the Land Law, which is expected to be promulgated in late 2025 or early 2026. This revised law aims to streamline administrative procedures related to land allocation, land use rights, and project approval, significantly reducing the time and cost associated with land acquisition for developers ([National Assembly](https://quochoi.vn/)). Key proposed changes include clearer regulations on land valuation, ensuring that land prices reflect market realities while preventing speculative hoarding. The new law is also expected to enhance mechanisms for land recovery for public purposes, including social housing, and to provide more transparent compensation frameworks for affected individuals. This is crucial for unlocking land banks currently held by state-owned enterprises or private entities that are not efficiently utilizing them.\n\nIn parallel with legal reforms, urban planning strategies are being recalibrated to support sustainable housing development. Major cities like Hanoi and Ho Chi Minh City are revising their master plans to expand urban boundaries, develop satellite cities, and create new residential zones with integrated infrastructure. This decentralization strategy aims to alleviate population pressure and housing demand in central areas, thereby moderating price increases. For instance, the Ho Chi Minh City Master Plan to 2040, with a vision to 2060, emphasizes the development of multi-polar urban areas, including new urban centers in the east and west, to redistribute population and economic activities ([Ho Chi Minh City People's Committee](https://www.hochiminhcity.gov.vn/)). These plans include provisions for large-scale infrastructure projects, such as new transportation networks and public utilities, to support the viability of these new residential areas. The government is also promoting the efficient use of existing urban land through urban regeneration projects, converting old industrial sites or underutilized public land into mixed-use developments that include residential components. This strategic approach to land management and urban planning is designed to increase the overall supply of land for housing, reduce development costs, and ultimately contribute to more affordable housing prices across the country.\n\n### Bolstering Legal Frameworks and Market Transparency\n\nThe government's determination to address the housing crisis extends to a comprehensive overhaul and strengthening of the legal frameworks governing the real estate market. The Prime Minister's call to prevent the \"blowing up\" of real estate prices necessitates a legal environment that promotes fairness, transparency, and accountability, thereby protecting consumers and deterring illicit practices. This policy direction involves revising key laws and implementing new regulations to ensure a more stable and predictable market.\n\nSignificant legislative efforts are underway to amend the Housing Law and the Real Estate Business Law, with expected promulgation in late 2025 or early 2026. These revisions aim to address existing loopholes, clarify ambiguities, and introduce stricter provisions to enhance market transparency and investor confidence. For example, the revised Housing Law is expected to include more explicit regulations on the ownership of apartments by foreign individuals and organizations, as well as clearer guidelines on the management and operation of apartment buildings ([National Assembly](https://quochoi.vn/)). This clarity is crucial for attracting legitimate foreign investment while preventing speculative inflows that could destabilize the market. The Real Estate Business Law amendments are anticipated to impose more stringent requirements on real estate brokers and agencies, mandating professional qualifications and ethical conduct, and holding them accountable for misleading information or fraudulent activities. This aims to professionalize the brokerage sector and reduce instances of price manipulation through false advertising or collusion.\n\nA key focus of these legal reforms is to improve the public disclosure of real estate information. New regulations are being drafted to mandate that all real estate projects, from their inception to completion, must provide comprehensive and easily accessible information to the public. This includes detailed project plans, construction permits, land use rights, financial status of the developer, and actual selling prices of units. The goal is to create a level playing field where buyers have access to all necessary information to make informed decisions, thereby reducing information asymmetry that often favors developers and speculators. The government is also exploring the establishment of a centralized, digital platform for real estate transactions and information, which would serve as a single source of truth for property data. This platform would integrate data from various ministries and local authorities, providing real-time updates on property ownership, transaction history, and market values, significantly enhancing transparency and reducing opportunities for fraud or price manipulation ([Ministry of Construction](https://www.xaydung.gov.vn/)). These legal and regulatory enhancements are critical components of the government's strategy to foster a healthy, transparent, and sustainable real estate market that serves the genuine housing needs of the people.\n\n### Fiscal and Financial Measures to Stabilize the Market\n\nBeyond direct supply-side interventions and regulatory tightening, the government is exploring and implementing a range of fiscal and financial measures to stabilize the real estate market and guide it towards sustainable development. The Prime Minister's concern about \"blowing up\" real estate prices extends to ensuring that financial policies do not inadvertently fuel speculation but instead support genuine housing demand and affordable options.\n\nOne significant area of focus is the review and potential adjustment of taxation policies related to real estate. Discussions are ongoing regarding the introduction or adjustment of property taxes, particularly for multiple properties or vacant land plots, to deter speculative hoarding and encourage efficient land use. While a comprehensive property tax law is still under consideration, the Ministry of Finance has been tasked with researching international best practices and proposing a framework that could be implemented in Vietnam ([Ministry of Finance](https://www.mof.gov.vn/)). The aim is to increase the cost of holding undeveloped land or multiple properties purely for speculative gains, thereby encouraging these assets to be brought to market or developed, increasing supply and potentially moderating prices. Additionally, the government is reviewing taxes on real estate transfers to ensure they are progressive and do not disproportionately burden first-time homebuyers, while still capturing value from high-value transactions.\n\nOn the financial front, the government is actively promoting the development of diverse financial instruments to support the real estate market, particularly for affordable housing. This includes fostering the growth of Real Estate Investment Trusts (REITs) and other collective investment schemes that can channel capital into housing development in a transparent and regulated manner. Furthermore, preferential credit packages and interest rate subsidies continue to be a key tool. Beyond the social housing loan packages, the government is exploring mechanisms to provide interest rate support for first-time homebuyers in the commercial housing segment, especially for properties below a certain price threshold. For example, specific directives from the State Bank of Vietnam have encouraged commercial banks to allocate a portion of their credit portfolios to support homebuyers with favorable terms, aiming to make homeownership more accessible to a broader segment of the population ([State Bank of Vietnam](https://www.sbv.gov.vn/)). These fiscal and financial measures are designed to complement regulatory actions, creating a comprehensive policy environment that discourages speculation, promotes responsible investment, and ultimately contributes to a more stable and affordable housing market in Vietnam."
}