Vietnam social housing report 2023

SOCIAL HOUSING RELATED REGULATIONS

INDICATIVE GOALS TO FACILITATE CONSUMER-ORIENTED SOCIAL HOUSING PROGRAMS

STANDARDS FOR LOW-RISE TOWNHOUSE

Required to provide attractive incentives for developers to take on social housing projects; Issue detailed long-term supply growth plans for social housing units

GOVERNMENT POLICIES

01

URBAN PLANNING

X Must not exceed 70m 2 construction footprint X Maximum plot ratio: 2.0 X Must ensure conformity with the construction planning approved by the competent state agency.

Secures land bank and residential infrastructure for social housing not only in Tier 1 but also Tier 2 cities

02

05

DEVELOPER

STANDARDS FOR APARTMENT BUILDINGS

CONSUMER CHALLENGES

To develop immediate supply for the market; Standardize design & planning to reduce costs & product delivery timeline; Sustainable development, green building

Remains to face regulatory speculations on social housing support programs;

X Floor size must be between 25m2 and 70 m2 X Maximum plot ratio: 1.5 X Must follow Building code of Vietnam

Lacks housing options within populated areas, and/or proximity to employment;

MARKET CONTROL

X Can be adjusted by the provincial-level People’s Committees with conditions: - Not more than a 10% increase compared to the maximum apartment area of 70m2 - The proportion of apartments with a floor area of over 70m2 does not exceed 10% of the total number of apartments.

Manage primary & secondary transaction price, to avoid market mark-ups and/or speculations.

CONTRACTORS Manage costs & timeline required to prioritize delivery of social housing products

04

03

SOCIAL HOUSING PRICE The selling prices/rents are calculated base on the principle of comprising construction costs, interest loan (if any), operation cost, and nominated profit (maximum 10% off total investment costs). Two price plans in draft law amendment: X Plan 1: the developer calculates and identify selling prices/rents following above principles and submit to Provincial People’s Committee for appraisal and approval. X Plan 2: the developer calculates and decides to sell prices/rents following the above principles. When the project is completed, the developer conducts the final settlement and audit and returns to buyers the excessive amount of unit value (if any).

CONCLUSION: Like highways and bridges, social housing is a crucial infrastructure to provide stable living conditions for the majority of the labor force, who play an indispensable part in driving Vietnam’s economic growth and attracting foreign investment into the country. For developers planning to enter this sector in near future, it is very important to balance between the selling price, construction quality, and sustainable factors. It is crucial for developers to conduct thorough research and feasibility study before starting the project. The government’s effort to promote affordable housing have been commendable, though land availability, infrastructure linkages, better policies and financing structures are needed to give the necessary push to the sector and is crucial for the development of social housing to successfully provide a home for all in the next 10 years. - - -

Source: Cushman & Wakefield Vietnam

Source: Cushman & Wakefield Vietnam