Vietnam's Housing Price Cuts Fail to Bridge Affordability Gap as Rental Plans Expand

Cheaper listings still leave buyers priced out

Vietnam expects to complete 87,601 social housing units in 2026, only 90% of its annual target, while price cuts in the commercial market are failing to bring many homes within reach. In Ho Chi Minh City, the shortage is particularly stark: a city government assessment cited by the Ho Chi Minh City Real Estate Association (HoREA) recorded no new affordable housing supply during the first nine months of 2026.

HoREA says developers have reduced primary market prices by about 5%, while some investors reselling properties have offered cuts of 20% to 30% and still struggled to find buyers. The primary market covers homes sold by developers; the secondary market covers homes resold by existing owners.

Hanoi also shows how falling prices can coexist with weak demand. Savills Vietnam recorded a 26% quarterly decline in apartment sales in the third quarter of 2026, with sales down 48% from a year earlier. Average asking prices for apartments sold by developers remained about VND 107 million per square metre.

The central problem is the combination of expensive homes, costly borrowing and too few properties designed for ordinary household budgets. More construction is planned, especially outside the urban core, but its location, price and suitability will determine whether buyers and tenants gain useful choices.

HoREA chairman Le Hoang Chau is calling for a broader response: affordable commercial housing alongside social housing, more reasonably priced rentals, clearer development rules and cheaper credit. Together, those proposals address people who qualify for public housing support and those whose incomes exceed eligibility limits but still fall short of commercial property prices.

Why discounts have not restored demand

The Vietnam Association of Realtors (VARS) put average apartment selling prices in the third quarter of 2026 at VND 79.3 million per square metre in Hanoi, VND 88.3 million in Ho Chi Minh City and VND 68.9 million in Da Nang. All three averages were unchanged from the previous quarter.

Those levels followed substantial increases. Compared with the first quarter of 2019, VARS recorded gains of 97% in Hanoi, 69.8% in Ho Chi Minh City and 76.2% in Da Nang. Buyers are therefore entering a market where recent stability follows years of rising prices.

DKRA Consulting recorded 13,215 apartments available from developers across 108 projects in Ho Chi Minh City and surrounding areas during the third quarter. Sales totalled 3,471 units, down 66% from the previous quarter, representing roughly 26% of that supply.

Secondary apartment prices in the southern market commonly fell 4% to 7% over the quarter. HoREA's larger discounts of 20% to 30% concern some individual investors, while DKRA's figures describe the more common adjustments across the projects it tracked.

Borrowing costs add another barrier. Housing loan rates were reported at around 14% to 16% annually in 2026. At those rates, a VND 1 billion loan would generate VND 140 million to VND 160 million in annual interest if the outstanding balance stayed unchanged, before principal repayments. Actual payments depend on the loan contract and repayment schedule.

The missing homes in the middle

Ho Chi Minh City's assessment for the first nine months of 2026 showed apartments accounting for 73.6% of housing units eligible for developers to raise capital. The middle segment represented just 7.1% of supply, while new homes remained concentrated in expensive categories.

Chau proposes encouraging affordable commercial housing priced according to local conditions, from VND 25 million to VND 30 million per square metre in remote provinces to VND 60 million to VND 70 million in major cities.

For an illustrative apartment measuring 60 square metres, the proposed urban range would mean a purchase price of VND 3.6 billion to VND 4.2 billion, before additional charges. That remains a substantial sum, making rental housing and social housing necessary parts of the same response.

Tran Xuan Luong, director of the Vietnam Institute of Real Estate Economics, argues that affordable commercial housing should complement social housing. More homes in the middle segment would give households with genuine housing needs alternatives to expensive projects and reduce the pressure created by a perceived shortage.

Announcements of social housing sales show a much wider price range. An October 30 bulletin described thousands of units offered from just over VND 12 million per square metre. Deputy Minister of Construction Nguyen Van Sinh has cited average social housing prices of VND 15 million to VND 25 million per square metre, while some projects discussed by business representatives cost VND 30 million to VND 40 million. Location, project costs and eligibility therefore matter alongside the headline price.

Millions already depend on renting

Ho Chi Minh City has about 4.2 million tenants. HoREA says most workers and migrant workers rent rooms costing around VND 2 million a month, while apartments with supporting infrastructure and amenities remain scarce.

A preliminary survey by the Ho Chi Minh City Labor Federation identified 3,181 cases needing rental housing and another 30,339 needing social housing through rental or purchase arrangements. Many workers currently live in small, privately developed boarding areas with limited space, infrastructure and fire safety provisions.

Vu Dang Khue, vice chairman of the Ho Chi Minh City Association of Small and Medium Enterprises, says formal rental supply has fallen behind urbanisation and population growth. He argues for planned developments connected to schools, healthcare, shops and essential services.

Pham Van Nam, chief executive of GH Land, identifies a related need: standard rental contracts and transparent information about rents, legal status, building quality and property management. Tenants need to know what they are paying for and what protections their contracts provide. Investors need predictable rules for operating buildings over many years.

For households unable to accumulate a deposit or manage a large mortgage, a dependable rental home offers a different route to stable accommodation. Its usefulness depends on rent, location and living conditions, especially for workers who need access to jobs.

Social housing construction is growing, but delivery lags

Deputy Minister of Construction Le Hong Vinh told the government's regular press briefing on November 4 that 293 social housing projects containing 363,065 units were under development nationwide. Of those, 128 projects had recently begun construction, comprising 183,293 homes: 140,492 for sale and 42,801 for rent.

The ministry recorded 114 ongoing social housing projects containing 63,970 rental units. Since June, another 29 projects had started with a combined 85,594 homes, including 33,886 rentals. Those rental figures are components of the project totals.

Completed homes remain well below the year's ambitions. By the briefing, 170 completed projects had delivered 46,962 homes against an annual social housing target of 97,271. The ministry forecast 87,601 completions by the end of 2026.

Rental delivery was also weighted toward the final part of the year. Some 8,314 units had been completed against a target of 17,176, with annual completions forecast to reach 18,049, about 5% above target. Rental homes would therefore account for roughly one fifth of the projected 87,601 social housing completions.

At a December 25 forum looking ahead to 2026, Deputy Minister Sinh had described a broader cumulative programme of 698 projects containing more than 657,000 homes, with nearly 170,000 completed. That programme total covers a different stage of development from the 293 projects described as currently underway at the November briefing. Sinh also expressed an ambition to reach the national goal of one million social housing units around 2028.

What the next milestones involve

Ho Chi Minh City's targets extend beyond the current construction cycle. Resolution No. 303/NQ-CP, dated September 30, 2026, assigns the city 181,257 social and rental homes for 2026 to 2030. About 57,657 are expected in 2027, nearly 32% of the total for that period.

The main dates and delivery milestones are:

• June 2026: A government push for rental housing was followed by the launch of 29 projects containing 33,886 rental units.
• September 30, 2026: Resolution No. 303/NQ-CP set Ho Chi Minh City's social and rental housing target through 2030.
• October 30, 2026: Proposed affordability measures included local housing policies and rent frameworks; the city was also considering 147 land lots for a pilot commercial housing programme.
• November 4, 2026: The construction ministry detailed the national social housing pipeline and annual completion forecasts.
• End of 2027: Knight Frank expects 42,593 additional apartments across expanded Ho Chi Minh City.

The ministry has prepared draft Housing Law amendments for submission to the 16th National Assembly. No adoption date was given. Developers and households still need final rules on eligibility, financing, land allocation and pricing.

New supply is moving beyond the urban core

Knight Frank forecasts that 22,187 of the 42,593 apartments expected by the end of 2027 will be in the former Ho Chi Minh City area. The remaining 20,406, almost 48%, would be elsewhere in the expanded city, including the former Binh Duong and Ba Ria-Vung Tau areas.

Those outer areas have a larger share of affordable and middle segment apartments. CBRE's 2025 figures illustrate the price gap: average primary apartment prices were about VND 47 million per square metre in former Binh Duong, compared with VND 92 million in the former Ho Chi Minh City area, a difference of about 49%.

Former Binh Duong recorded 17,300 new apartment launches in 2025. Across the expanded city, apartment supply was forecast to approach 34,000 units in 2026, with more than half in former Binh Duong. DKRA's nearer term forecast put fourth quarter launches at 7,000 to 10,000 apartments, concentrated in the east, south and former Binh Duong.

Expensive projects continue to shape central prices. More than half of new apartment supply in the former city area in 2025 was in the high end and luxury categories. A later market estimate put average primary asking prices at USD 4,210 per square metre, equivalent to more than VND 100 million, up 3% over the quarter.

Vo Huynh Tuan Kiet, CBRE Vietnam's head of residential project marketing, says buyers increasingly consider construction quality, management, amenities and living conditions. He also identifies transport connections and development around multiple urban centres as forces shaping the market. Lower prices outside the centre become more useful when residents can reach jobs and services reliably.

Why rental developers want support lasting decades

Le Huu Nghia, general director of Le Thanh Company, says rental investment requires paying for land, construction and interest long before a project recovers its costs. His company's proposed Le Thanh Tan Kien 2 development would contain about 2,000 rental homes, but the land's mixed commercial and service classification has complicated access to bank financing.

HoREA estimates that rental projects typically need at least 20 years to recover their capital. A developer selling apartments receives large payments as homes are sold; a rental operator receives smaller amounts over a much longer period while continuing to pay for management and upkeep.

Chau proposes exemptions from land use fees and land rents, tax incentives, preferential loans over longer periods and faster investment procedures. HoREA would reserve incentives for projects committed to renting homes for at least 20 years.

HoREA also wants provincial authorities to establish rent frameworks for affordable housing financed outside the state budget. Provincial People's Councils would gain authority to adopt local policies for affordable commercial housing through amendments to the Housing Law and Land Law.

Those proposals seek to make costs and expected revenue easier to calculate before construction begins. Nam's call for transparent rental data and standard contracts addresses the operating side of the same problem: buildings need sustainable income, while tenants need predictable terms and acceptable living conditions.

Who receives the benefit of cheaper development?

The draft Housing Law amendments described by the Ministry of Construction propose clearer income and eligibility rules, priority access for disadvantaged groups, preferential loans and housing funds operating without a profit objective. They also cover land for social housing, rentals and accommodation for industrial workers.

Investors would receive support through land fees, rents, taxes and credit, and could use commercial and service activities within projects to offset eligible development costs. Proposed pricing rules would base sale prices, rents and rent to own payments on legitimate costs and regulated profits, excluding state incentives from the prices charged to residents.

Transaction controls would limit each eligible beneficiary to purchasing or acquiring through rent to own arrangements one social housing unit. Transfers would be restricted during the first five years, directing subsidised housing toward its intended occupants.

Developers are also seeking changes to their returns. Bui Nguon Phong, chairman of Le Phong Group, has proposed increasing the permitted social housing profit margin from 10% to 15% of construction investment costs, citing materials, labour and delays. That request sits alongside the ministry's effort to keep prices within eligible households' budgets.

Project delays remain a large obstacle. Sinh identified about 2,991 stalled property projects with investment approaching VND 2 quadrillion and said guidance under National Assembly Resolution 110 had addressed land law difficulties affecting 326 projects. Bringing projects back into construction could expand supply, while affordability measures would shape which homes developers build.

Credit relief must reach builders and households

HoREA wants loans for rental housing, affordable commercial housing and certain key industrial park projects excluded from banks' credit growth limits. Those limits govern how quickly banks can expand lending; an exemption would give the selected categories more room to obtain finance.

Chau also calls for the State Bank of Vietnam to press commercial banks for meaningful lending rate reductions. Lower financing costs would help developers during construction and reduce repayment burdens for buyers.

MB Securities has identified conditions supporting possible rate reductions, including slower credit growth and deposits growing faster than lending during the first nine months. It nevertheless expects pressure on bank funding costs to persist for around three months as earlier deposits mature and are renewed at higher rates.

Luong cautions that housing prices also reflect land costs and expected developer profits, so incentives take time to affect selling prices. The practical test is whether completed homes arrive at prices and rents households can manage. More apartments, easier project approvals and cheaper loans become useful together when the resulting housing matches where people work, how they live and what they can pay.

Key Points

• Vietnam forecasts 87,601 social housing completions in 2026, about 90% of its annual target.
• Price cuts have struggled to revive sales as borrowing costs and purchase prices remain high.
• Ho Chi Minh City's new supply during the first nine months contained no affordable homes, according to a city assessment cited by HoREA.
• Rental completions nationwide are forecast at 18,049 units, above the annual target.
• New commercial supply is shifting toward outer areas, where prices are generally lower.
• Proposed reforms cover land, credit, rents, eligibility and controls on social housing transactions.
• Ho Chi Minh City has a target of 181,257 social and rental homes for 2026 to 2030.