Social housing prices are skyrocketing.

While commercial housing projects are priced at only 10 million VND/m2, some social housing projects reach 16 million VND/m2… The price range of 8-12 million VND per m2 from last year has almost disappeared from the market.

In a recent interview, Deputy Minister of Construction Nguyen Tran Nam commented: "In the past period, the entry of social housing onto the market has also driven down the prices of commercial housing. This is a very positive impact."

However, according to our survey, the selling prices of social housing in recent projects in Hanoi have gradually increased, becoming comparable to some commercial housing projects, and in some cases even more expensive than commercial housing by up to 6 million VND/m2.

Prices below 10 million to 12 million VND per square meter have almost disappeared from the market.

Specifically, the social housing project at 143 Tran Phu (Ha Dong), invested by Song Da Urban Development and Construction Investment Joint Stock Company – SDU ( thuộc Song Da Corporation), has a provisional price of over 16 million VND/m2 (including taxes and maintenance fees).

If we compare the location and price of this project with some other projects in the same area, it can be seen that this social housing project is not cheap at all. For example, in the same area, the 103 Institute Van Quan apartment project is being offered on the market at 13.9 - 14.5 million VND/m2 (including VAT and 2% maintenance fee).

The commercial apartment project at 110 Tran Phu Street has now completed its structural construction and is being sold at prices ranging from 18 to 18.5 million VND/m2 (including VAT).

In addition, some other projects, such as the social housing project at 30 Pham Van Dong (Cau Giay district) invested by Bac Ha Investment Construction and Trading Service Joint Stock Company, have an estimated price of 14.8 - 14.9 million VND/m2. Along with several other projects about to be launched on the market, the estimated price is also 14-15 million VND/m2.

Although the current social housing prices are only provisional and the exact prices will only be available after final settlement, some developers say that the official prices will not differ significantly from the provisional prices. So, low-income earners are increasingly worried as each subsequent social housing project becomes more expensive. Does this still qualify as preferential pricing for low-income earners?

Should there be a price ceiling for social housing?

Speaking to the press on the sidelines of a recent social housing seminar, Mr. Nguyen Manh Ha, Director of the Department of Housing and Real Estate Market Management (Ministry of Construction), stated that depending on the conditions and type of housing, the construction costs will vary, resulting in different selling prices. He argued that setting a price ceiling for social housing is unreasonable.

"There are already regulations allowing developers to make a profit of only 10%, which already controls the cost of social housing. It's impossible to mandate that they sell at 8 million or 10 million VND/m2. In some areas, complex foundation work will be costly, leading to price increases. It's impossible to impose a fixed price; we can only control it based on the developer's predetermined profit margin," Mr. Ha explained.

Another issue is, if social housing is sold at a price exceeding 16 million VND (including taxes and fees), will customers who borrow from the 30,000 billion VND loan package face difficulties accessing bank loans?

Concerns have been raised about the fact that social housing prices are currently higher than some commercial housing projects. In an interview with a reporter, Dr. Pham Sy Liem, Vice President of the Vietnam Construction Association, stated that while social housing is not entirely market-driven, developers are subject to a fixed profit margin of 10%. However, social housing should have price controls and a price ceiling.

"If social housing prices are higher than commercial housing prices, will the quality of the housing be better? Given the phenomenon of social housing prices exceeding commercial housing prices, the management agency should reconsider the situation to avoid excessively inflated social housing prices. Measures are needed to force developers to lower prices," Mr. Liem said.

However, according to Mr. Liem, the final decision to buy a house still rests with the people. If the price of social housing is too high, they can choose commercial housing projects with lower prices. If people flock to buy affordable commercial projects, then developers will have to reconsider their approach to social housing.

Despite numerous government incentives for social housing developers aimed at lowering prices compared to commercial housing, the current market situation is the opposite. It's unclear where these government incentives for social housing projects are going.

While the market offers commercial housing projects with apartments priced at only 10-14 million VND/m2, social housing projects are priced at 16 million VND/m2 – a real paradox! The issue of controlling the cost of social housing projects, as suggested by the Vice President of the Vietnam Construction Association, deserves consideration from the relevant authorities.

According to Infonet.vn