According to the Vietnam Real Estate Market Evaluation Research Institute (VARS IRE), previously, young people could choose many types of housing with reasonable prices such as small-area apartments, renovated collective houses, commercial housing or affordable apartment projects in suburban areas. These are products that play the role of the "first step" helping most people gradually accumulate assets and realize their dream of settling down.
However, in recent years, new supply in the market has not met the demand for this segment. High land prices and escalating construction investment costs make it difficult for real estate businesses to develop affordable housing segments.
Research data from VARS IRE shows that from the third quarter of 2024 to now, the commercial apartment segment in Hanoi is gradually establishing a new price level, with projects opened for sale mainly positioned from 60 million VND/m2. Meanwhile, in Ho Chi Minh City and expanded areas after mergers, buyers have more choices, but for young people and new households to own a 2-bedroom apartment here, they also need support from family or long-term loans.
VARS IRE believes that, despite many impacting reasons, the fact that house prices are setting new standards is leading to changes in the roadmap for young people's settlement. Modern youth are flexibly adjusting their marriage and separation plans, prioritizing optimizing cash flow through choosing living space for rent or maintaining a multi-generational family lifestyle.
The above reality shows that the current problem is not only about needing social housing or needing a supply of affordable housing, but also a'start-up housing' ecosystem - where young people can access housing suitable to their financial capacity in the early years of starting a business before gradually accumulating to own housing.
To promote the development of this segment, VARS IRE believes that the State needs to play a leading role in creating mechanisms and coordinating resources, especially in planning, land funds, finance, controlling rental prices and ensuring the right beneficiaries of rental housing development policies.
Accordingly, the State needs to allow the extension of the progress of land use fee payment, exemption or reduction of financial obligations in the first years of operation, or apply a payment mechanism according to the project exploitation progress.
When the occupancy rate is stable and rental revenue reaches a certain threshold, the investor will fully fulfill financial obligations according to the committed roadmap. This approach both helps reduce initial capital pressure for businesses and does not cause revenue loss to the state budget.
In addition, it is possible to study a flexible conversion mechanism between lease and sale. For the area converted to sale, investors must fully fulfill their financial obligations regarding land before putting it into transaction. Conversely, the area that continues to be maintained for long-term lease will enjoy a land payment mechanism according to progress. This both creates fairness between real estate exploitation forms and encourages businesses to maintain a stable rental housing fund in the long term.
International experience shows that the decisive factor for the success of the rental housing model does not lie in controlling the profits of enterprises but in the ability to access long-term capital sources at low cost. Instead of rigidly stipulating a fixed profit level for investors, it is necessary to build a mechanism to determine the profit rate according to market principles. A reasonable profit rate can be determined based on the benchmark capital interest rate plus a suitable level of risk compensation. When capital costs decrease, the expected profit of enterprises also decreases; conversely, when the interest rate level increases, this mechanism still ensures that the project maintains its financial feasibility.
A more flexible approach, balancing the interests between the State, businesses and tenants, will create a foundation for forming a sustainable rental housing market in the long term.
