Establishing the National Housing Fund is necessary to meet the housing needs of low- and middle-income people and a positive development to encourage hope in addressing the affordable housing shortage in major urban areas such as Ha Noi and HCMC. However, developing and ensuring the long-term effectiveness of this residential model requires practical studies combined with research tailored to market conditions and financial resources. 

This edition of the Savills Market Snapshot features expert insights on the National Housing Fund model.

Implementing and researching a National Housing Fund model is a crucial initiative

Researching and implementing a National Housing Fund model in Viet Nam is essential to meet the needs of low- and middle-income people who need to buy or rent houses at affordable prices. The average income remains low amidst rapid urbanisation and continuously rising real estate prices, yet the demand for housing continues to grow. 

This Fund would help people access affordable commercial and social housing and increase homeownership opportunities specific to workers. The National Housing Fund model is crucial in addressing housing security and promoting sustainable residential development. It would also maintain affordable housing and ensure the balance of supply and demand. 

If the National Housing Fund is approved and implemented, clear objectives, diversified funding sources, and transparent management are required to ensure long-term success.   

Lessons from Singapore and China demonstrate that a National Housing Fund will be indispensable in securing accessible housing for workers as it should primarily provide financial support for those who want to buy or rent houses at affordable prices. Many low- and middle-income workers in major cities do not qualify for social housing and cannot afford market listings. 

Therefore, an assessment mechanism for employees’ contributions and the financial ability of target groups is required to ensure fairness and goal alignment.   

Alongside contributions from workers, enterprises, and the state budget, the involvement of real estate businesses would further keep the National Housing Fund operating sustainably. In return, the government can offer incentive policies such as but not limited to tax reductions and financial support.   

Furthermore, a strict and transparent management mechanism is required to avoid losses, corruption, and misuse of funds. Solutions include issuing clear regulations on capitalisation, fund management and allocation, setting housing standards to prevent low-quality construction, setting binding agreements that prevent speculation, and establishing an independent monitoring mechanism that enables public and social organisations to oversee the Fund’s operations while simultaneously developing a transparent public digital portal with details on revenues, expenditures, beneficiaries, and project progress. 

Do Thu Hang, Senior Director, Advisory Services, Savills Ha Noi

Key Factors Shaping the Development of Large-Scale Models, such as a National Housing Fund 

European countries like France, Germany, and Sweden, as well as Asian countries such as South Korea, Singapore, and China, have been operating a National Housing Fund for decades to support citizens in efficiently accessing housing.  

There are six standard features of successful large-scale models. They include a clear legal structure, diversified funding sources, synchronised land and infrastructure planning, transparent management, stringent oversight, and coordinated efforts from all stakeholders.

The legal framework element is critical for successfully implementing a new large-scale model. Aligning with laws and regulations that govern the operation of the National Housing Fund, and the Housing & Development Board also curates a transparent and stable foundation. This framework will also serve as a guideline for actively diversifying funding sources from the state budget, bond issuance, contributions from the private sector, international organisations, and pension funds, ensuring recurring capital flow.  

Learning from countries that have successfully implemented similar models, especially those with comparable institutions, policies, and market conditions, is important.   

A prosperous model will include strong government support, stable financial mechanisms, transparent management, well-integrated land use planning, and close partnerships with the private sector.  

Giang Huynh, Director, Research & 22M, Savills HCMC