Increasing Income Threshold for Social Housing, a Step Towards the Dream of Stable Housing

GOVERNMENT RAISES INCOME THRESHOLD FOR SOCIAL HOUSING ELIGIBILITY, BRINGING HOMEOWNERSHIP DREAMS CLOSER

INCOME DISPARITY AND THE HOUSING AFFORDABILITY GAP
A recent survey conducted by the Ho Chi Minh City Human Resources Forecast Center and Labor Market Information (Falmi) reveals a stark contrast between income expectations and reality. Among over 144,000 job seekers, 31.76% desire a monthly salary exceeding 20 million VND, the highest among all groups, followed by 25.83% aiming for 5–10 million VND, while only 3.64% would accept less than 5 million VND. Conversely, among over 285,000 job vacancies, only 9.77% offer salaries above 20 million VND per month—the least in demand. Positions paying 5–10 million VND account for 44.47% of total recruitment needs, while 11.37% of jobs pay under 5 million VND monthly.

For many workers in Ho Chi Minh City, such as Mr. Minh and his wife, Ms. Hoa—both factory employees in Tan Thuan Export Processing Zone—the dream of owning a social housing unit remains distant. With a combined monthly income of around 25 million VND, after covering living expenses and raising their young child, they can only save about 5 million VND. Meanwhile, the average price of a social housing unit ranges from 720 million to nearly 2 billion VND. Even office workers earning around 35 million VND monthly, saving 8–10 million VND per month, face challenges, as social housing projects in the city currently cost between 18 and over 35 million VND per square meter. For a 1.2 billion VND unit, monthly installments of 5–10 million VND mean the home’s price is 10 to 20 times their annual income.

PROGRESS AND CHALLENGES IN SOCIAL HOUSING DEVELOPMENT
By 2025, completed, under construction, and approved social housing projects have reached 59.6% of the target of 1 million units by 2030. However, achieving this year’s goal of 100,000 units remains a significant challenge. The Prime Minister has emphasized the need for diverse social housing segments, flexible purchase and rental options, and synchronized essential infrastructure—including transportation, electricity, water, telecommunications, environment, healthcare, education, and culture.

To accelerate implementation, the Ministry of Construction has proposed amendments to Decree 100/2024/NĐ CP, including raising the income threshold for social housing eligibility. Under the new proposal, the monthly income limit for single individuals would increase from 15 million to 20 million VND, and for married households, from 30 million to 40 million VND. Local police would verify income conditions for those without labor contracts. Additionally, the government is considering reducing preferential loan interest rates for social housing purchases through the Vietnam Bank for Social Policies, aiming to improve accessibility for citizens.

EXPANDING ACCESS: A STEP FORWARD BUT NOT ENOUGH
Previously, the income threshold for social housing eligibility was set at 15 million VND per month for single individuals and 30 million VND for married couples. According to Kim Oanh Group, this limit was unrealistic and excluded many potential buyers, particularly those with dependents, renters, or those supporting elderly parents, young children, or medical treatments. Even individuals earning slightly below 15 million VND but exceeding the limit due to overtime or bonuses were disqualified.

In Ho Chi Minh City, where monthly incomes of 20–25 million VND still struggle to afford housing, the demand for social housing remains high. A representative from Kim Oanh Group stated that the Prime Minister’s approval to raise the income threshold will make homeownership more attainable and expand the customer base, encouraging further investment in the sector. This adjustment is expected to benefit young professionals, experts, and middle income families, stimulating demand and revitalizing the market.

CREDIT INCENTIVES AND STREAMLINED PROCEDURES NEEDED
Ms. Nguyen Thi Bich Ngoc, founder of Sen Vang Real Estate Consultancy, noted that even with the adjusted income thresholds, purchasing commercial housing remains out of reach for many due to prices being 15–20 times annual incomes. For social housing, without stable preferential interest rates and extended loan terms of 15–20 years, young buyers still face significant financial pressure. Thus, adjusting income thresholds is only part of the solution—flexible credit mechanisms and increased social housing supply in convenient locations are equally essential.

Lessons from 2013–2016 show that expanding eligibility and offering incentives for low cost commercial housing improved market absorption. Vietnam could consider adopting similar policies for young buyers of affordable commercial units, featuring long term loans (25–50 years), stable interest rates, and reasonable grace periods—models successfully implemented in Singapore and Japan. Such measures would reduce monthly principal payments and enhance homeownership opportunities for younger generations.

Mr. Vo Huynh Tuan Kiet, Director of Project Marketing at CBRE Vietnam, added that young buyers still face down payments of 400–600 million VND and monthly installments of 10–15 million VND. To improve accessibility, additional support—such as extended loan terms, reduced down payment ratios, and strict price controls for social housing—is necessary.

BUSINESS INITIATIVES AND FUTURE PLANS
Despite economic challenges since 2020, Kim Oanh Group has adapted to market demands by shifting focus to affordable commercial and real value housing while maintaining high end urban and international collaborations. As a major developer of social housing, the company utilizes land acquired over a decade ago at lower costs, enabling the conversion of commercial projects into social housing to support residents.

However, funding remains a hurdle. Slow disbursement of loans has severely impacted project timelines and buyer accessibility. Many completed projects, even after 2–3 years, still await loan disbursement despite buyers having paid 20–30% upfront. Kim Oanh Group proposes a dedicated credit package for social housing, separate from commercial loans, with truly preferential interest rates below 4% and stability for at least 20 years. Simplified loan and disbursement procedures for both developers and buyers would enhance capital absorption and improve housing accessibility.

The company plans to develop 40,000 social housing units by 2028, focusing on urban areas with high labor demand, such as Ho Chi Minh City, Dong Nai, and Binh Duong. To date, it has completed three projects with over 4,000 units and broke ground on three new projects in Dong Nai in late August.

At Le Thanh Real Estate, a new project in western Ho Chi Minh City benefits from well developed transport infrastructure, offering nearly 2,000 units ranging from 26–60 m²—ideal for young families and single individuals. A key feature is the option to convert rental agreements into ownership after 10 years, requiring only an additional 25% payment. This financial model transforms monthly rent into long term savings, providing a sustainable path to homeownership.

POLICY RECOMMENDATIONS AND LONG TERM SOLUTIONS
Experts suggest that Vietnam should explore long term, low interest loan programs similar to those in Singapore and Japan, where 25–50 year mortgages with stable rates and grace periods ease financial burdens. Additionally, stricter price controls, reduced down payment requirements, and simplified administrative procedures would further support affordability.

The National Assembly has approved a pilot resolution introducing special mechanisms for social housing development. However, without addressing funding delays and high land costs—particularly in current auctions—developers may hesitate to invest, leaving low income earners with limited housing options. A balanced approach, combining income adjustments, credit incentives, and supply expansion, is critical to making the dream of homeownership a reality for more Vietnamese citizens.