Many banks are simultaneously implementing preferential credit packages for people under 35 years old to buy social housing with interest rates lower than 2% in the first five years. This policy shows priority for young people, the current main labour force, to settle down.
In the inner-city area of Ha Noi, apartment prices have increased dramatically to 5-6 billion VND or more. (Photo: nhandan.vn)
This programme is part of the implementation of the government’s Resolution 33/NQ-CP (March 11, 2023) on developing social housing, accommodation for workers, and the renovation or reconstruction of old apartment buildings.
Housing prices continue to increase
Since the beginning of this year, banks have launched a range of “ultra-low” home loan packages. Duong Quang (33, from Nghe An) began planning to buy a flat. With over 2.5 billion VND in savings, he and his wife intended to buy a two-bedroom apartment on the city’s outskirts, borrowing around 40% of the total cost from a bank. Although he works in central Ha Noi, he opted for a suburban location in the hope of finding more affordable pricing. However, after enquiring about a project in Dong Hoi Commune, Dong Anh District, he had to hesitate, as the prices ranged from 3.4 to 3.7 billion VND for flat between 68–73 square metres (roughly 49–51 million VND per square metre), exceeding the couple’s financial capacity.
Many others find themselves in similar circumstances, grappling with the housing affordability dilemma. According to Cao Thi Thanh Huong, a specialist at Savills, people under the age of 35 have typically been working for no more than a decade - not long enough to accumulate sufficient funds for a significant real estate investment. Meanwhile, housing prices in Ha Noi are rising rapidly, far outpacing wage growth.
In fact, there have been many policies to help young people and low-income earners buy homes in major cities. Examples include the 30 trillion VND loan package, the 120 trillion VND housing credit programme offering preferential interest rates, and the scheme to build at least one million social housing units between 2021 and 2030. However, few have been able to benefit from these incentives, largely due to a lack of supply in the mid-range apartment segment.
According to Dr. Nguyen Van Dinh, Vice Chairman of the Viet Nam Real Estate Association, there is currently a supply-demand imbalance pushing housing prices higher, particularly in the urban centres of major cities. In Ha Noi, for instance, inner-city apartment prices generally start from 5 to 6 billion VND; in suburban areas, prices may be lower, at around 3 to 4 billion VND, but such projects are scarce.
Not just a social security issue
Discussing the latest preferential loan package, Nguyen Quang Huy, an expert from the Faculty of Finance and Banking at Nguyen Trai University, noted that in the context of a real estate market undergoing restructuring and recovery after a prolonged downturn, the State Bank of Viet Nam (SBV)’s decision on implementing a preferential credit package for under-35-year-old people purchasing social housing is a significant policy shift.
Accordingly, for the first five years from the date of initial disbursement, customers under 35 buying social housing will enjoy interest rates 2% lower than the average medium and long-term lending rates in VND from the four state-owned commercial banks (Agribank, BIDV, Vietcombank, VietinBank). For the subsequent 10 years, preferential interest rates will continue to apply, at one percentage point lower than the market average. The applicable interest rate until June 30, 2025, is 6.1%/year. From July 1, 2025, onwards, SBV will announce the applicable rates every six months for banks participating in this program
“This is one of the longest-term preferential credit packages ever introduced. It clearly reflects the government’s determination to achieve the goals outlined in Resolution 33/NQ-CP (March 11, 2023) on social housing, workers’ housing, the reconstruction of old apartment buildings, and the National Housing Development Strategy to 2030, which considers social housing not only as a welfare matter but also as a vital component of a sustainable real estate market structure,” Huy stated.
However, many experts argue that in a context where housing prices are increasingly out of reach compared to income levels, the dream of homeownership among young people still needs more support. Cao Thi Thanh Huong suggested that loan package should be extended to 20–30 years - equivalent to a full working lifecycle — to reduce the monthly debt burden and allow borrowers to invest in maintaining their labour force. According to her, stable interest rates are essential, as any fluctuations can cause anxiety, affecting the quality of life and the psychology of settling down — a key factor in encouraging people to settle and make long-term contributions to society.
Sharing the same view, Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), stated that most young people or those with average incomes today can only afford housing projects priced between 2 and 3 billion VND per flat. However, this segment is increasingly scarce and has received little attention from investors, particularly in Ha Noi and Ho Chi Minh City. Creating favourable mechanisms for young workers to purchase affordable housing will motivate real estate firms to restructure their portfolios and shift investment toward this segment.
The key to solving the housing problem at its root is not only to rely on reducing interest rates but also to have a large credit fund, while controlling housing prices and increasing the supply of market segments with high demand to avoid overheating and virtual increases.
According to statistics from Numbeo, the world’s largest database on living costs, as of Q1/2025, a worker living and working in Ha Noi would need to save for an average of 24.7 years to afford a house in the city.