HANOI: Vietnam’s affordable housing market continues to face a critical mismatch: demand remains high, but supply is constrained.
While credit packages have been rolled out, industry experts say access and disbursement remain major challenges.
They argue that unlocking affordable financing is vital for the sector’s growth.
But to make preferential loans truly effective, Vietnam needs a coordinated approach, combining simplified procedures, supportive policies and more flexible credit tools.
In mid-2023, the government launched a 120 trillion dong credit package aimed at boosting the social housing segment. Since then, lenders including TPBank, VPBank, MB, HDBank and Techcombank joined the programme, expanding the package to 145 trillion dong.
However, data from the Construction Ministry showed that only 2.84 trillion dong, or less than 2%, had been disbursed.
Of that, just 265 billion dong went to homebuyers across 15 projects.
Can Van Luc, chief economist at BIDV, said the main issue was not a lack of capital, but bureaucratic hurdles in project approvals and investor selection. He emphasised the need to remove such procedural roadblocks to improve capital flow.
“The credit package is essentially commercial,” Luc said. “Participating banks are offering lower rates, around 1.5% to 2% below market, by using part of their own profits. However, these loans are only available for three to five years due to the short-term nature of bank deposits.”
Governor of the State Bank of Vietnam (SBV) Nguyen Thi Hong has pointed out a structural challenge: banks rely on short-term deposits, while housing projects require long-term capital.
This mismatch restricts the banking system’s ability to provide sufficient housing loans.
She stressed that bank credit should only play a supporting role, and not serve as the main policy instrument. Instead, the government could consider entrusting public funds to banks or setting up a national housing fund to provide longer-term, low-interest loans.
Luc cited successful models in countries like Singapore, South Korea and China, where housing funds are built using state budgets, bonds, homebuyer savings, and contributions from financial institutions.
In some cases, social insurance funds are also used.
He recommended that Vietnam prioritise low-income earners and young people under 35 with stable jobs but limited incomes, a strategy used effectively in other countries. These beneficiaries could also contribute to the fund, creating a more sustainable model.
Deputy Minister of Construction Nguyen Van Sinh said that local authorities across the country had earmarked over 1,300 land plots covering more than 9,700ha for social housing development.
Most provinces and cities had allocated adequate land for this purpose, often selecting prime locations near urban centres and industrial zones, with access to essential technical and social infrastructure.
However, Sinh said, there were still areas where the designated land did not match actual demand.
Notably, in some localities, developers of commercial housing projects proposed converting the legally required 20% of land for social housing into cash payments instead.
This practice risked shrinking the land pool available for social housing development, Sinh said. — Viet Nam News/ANN
