Socializing Social Housing Prices: Healthy Competition or a Loophole for Profiteering?

A Reform on Pricing and Fairness in Housing Policy

Recently, Vietnam's Government issued Decree 192, triggering major changes in the social housing (NƠXH) market. Under the new regulations, developers are granted the right to independently determine the selling, rental, and lease-purchase prices of social housing units, without needing prior approval from the Department of Construction as before. This clearly marks a shift in policy from pre-approval to post-check mechanisms.

However, while the reform aims to unblock supply and reduce administrative procedures, it has also raised many concerns: Will allowing developers to set their own prices unintentionally push up social housing prices, contradicting the very goal of social welfare?

Positive Outlook: Greater Flexibility for Developers, Lower Potential Costs

According to Dr. Trần Việt Anh, Standing Vice President of Hùng Vương University in Ho Chi Minh City, eliminating the pricing approval step enables developers to better control costs, shorten preparation time, and reduce unnecessary expenses, such as prolonged loan interest and procedural overhead.

In the current context where many provinces are working to increase social housing supply, competition among developers may force them to calculate and offer reasonable prices to attract buyers. Dr. Trần believes that if businesses take advantage of this new mechanism to cut costs, social housing prices may actually decrease.

Potential Risks: Inflated Prices, Weak Oversight

Despite these positives, Dr. Trần also warns that the current post-inspection mechanism is not yet fast or effective enough, leaving room for some developers to inflate input costs and raise selling prices close to the legal limit.

Even though the law caps the profit margin at 10%, if the total input costs are exaggerated, the final selling price may still be much higher than it should be.

A major concern is that by the time violations are discovered, the sales may already be completed, making it very difficult to rectify the situation and protect buyers' rights.

Moreover, the current commercial housing prices are high, and the large gap between commercial and social housing prices may incentivize some developers to manipulate social housing prices, taking advantage of welfare policies for personal gain—completely defeating the purpose of supporting low-income groups.

Suggested Solutions: Transparency and Stronger Post-Inspection

To mitigate risks, Dr. Trần Việt Anh proposes several solutions:

• Publicly disclose the cost structure and breakdown of each housing project on official portals to allow for media and community monitoring.

• Implement regular and random post-inspections and strictly penalize violations such as inflated costs or abuse of policy.

• Compare prices across projects in the same area to detect irregularities.

• Increase supply and attract more developers to participate, creating a transparent and fair competitive environment.

Developer Response: Profiteering is Difficult Due to Mandatory Audits

In an interview, Mr. Lê Hữu Nghĩa, CEO of Lê Thành Company and Vice Chairman of the Ho Chi Minh City Business Association, affirmed that "profiteering from social housing pricing is very difficult."

The reasons lie in the clear post-inspection procedures:

• Before selling, developers must submit pricing documents to the Department of Construction and publish them online.

• Within 180 days after project acceptance, developers must submit audited cost reports and investment finalizations.

• If the actual cost is lower than the selling price, developers must return the difference to buyers. If the audited price is higher, they are not allowed to charge extra.

• Developers cannot collect more than 95% of the contract value before the buyer receives the land use right certificate (red book).

Expanding Authority to Approve Buyers: Convenient but Requires Vigilance

In addition to granting developers pricing authority, Decree 192 also allows them to determine the list of eligible buyers, no longer requiring approval from the Department of Construction.

According to Mr. Lê Hoàng Châu, Chairman of the Ho Chi Minh City Real Estate Association, this is a significant step to accelerate social housing investment and transactions. However, the law still emphasizes the importance of post-checking: if authorities later find that the buyer is not part of the eligible group, the contract may be canceled, and the house can be repossessed or forcibly reclaimed.