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Policymakers and industry leaders discuss what is needed for affordable rental housing to facilitate Vietnam’s next stage of urban and real estate development.

We recognize that Vietnam’s property market has traditionally favored homes for sale over rental housing.

First, this stems from the deeply-rooted Vietnamese culture of homeownership. The concept of “settling down before building a career” remains deeply ingrained, with many people believing that wherever they work, they should eventually buy a home, establish a family, and educate their children there. Renting is often associated with instability, lack of success, or an inability to provide for future generations.

Dr. Doan Van Binh, Vice Chairman of the Vietnam National Real Estate Association and Chairman of the CEO Group

As a result, Vietnam’s homeownership rate is among the highest in the world. According to Kentucky-based real estate company Garret, Vietnam ranks third globally with a homeownership rate of 90 per cent, behind only Romania and China. Meanwhile, data from Global Property Guide places Vietnam 13th globally, also with a homeownership rate of 90 per cent.

This mindset has also contributed to the rapid rise in housing prices. Figures show that Vietnamese property prices increased by approximately 59 per cent over the past five years, higher than in the US (54 per cent), Australia (49 per cent), Japan (41 per cent), and Singapore (37 per cent), according to VietnamPlus. Rental yields in Vietnam range from 2-4 per cent annually, depending on location; significantly lower than the 5-7 per cent typically seen in many regional markets.

Vietnam’s house price-to-income ratio is also extremely high, ranging from 23.7 to 30-times annual income. In other words, households would need to save the equivalent of 23-30 years of total income, without spending anything, to purchase an average home. This is roughly 1.6 to 2-times higher than the global average of 11 to 15-times, while the generally accepted affordable threshold is 5 to 7-times.

Second, Vietnam’s long-term capital market remains underdeveloped, including the market for Real Estate Investment Trusts (REITs).

Third, development costs, regulatory compliance costs, and borrowing costs remain high.

Fourth, the institutional framework has largely favored housing-for-sale development. The State derives significant revenues from land-use fees, while developers prefer projects for sale because they can access financing more easily, mobilize capital before project completion, recover investment more quickly, and face shorter-term obligations, which are generally fulfilled upon handover of homes to buyers and transfer of technical infrastructure to the authorities.

However, Vietnam’s socio-economic landscape is changing rapidly. Urbanization continues to accelerate, urban populations are expanding, and labor mobility is increasing at an unprecedented pace. At the same time, housing prices remain high and continue to rise, placing homeownership beyond the reach of many young people, workers, professionals, scientists, and middle-income households. This poses growing challenges for social welfare and housing accessibility.

As representatives of the real estate business community, we strongly support the government’s efforts and hope it will establish appropriate mechanisms to encourage private sector participation in the development of rental housing and affordable housing in line with the Party and government’s policy directions.

Specifically, the State should play a facilitating role through institutional reforms, planning, land allocation, and credit policies, based on the principle of neither providing blanket subsidies nor leaving the market entirely to self-regulate.

The role of businesses is to participate in developing rental housing with reasonable profit expectations while ensuring professional management and operations.

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Over the past several years, the government has submitted a range of mechanisms and policies to the National Assembly (NA) aimed at removing bottlenecks in the land sector in general and the housing and real estate market in particular. The NA has issued Resolution No. 254 and the government has adopted Resolution No. 49, both of which contain important measures to unlock resources for the market.

Mr. Vu Sy Kien, Deputy Director of the Department of Land Administration at the Ministry of Agriculture and Environment

First, regarding land resources for housing development, local authorities have been given greater autonomy to review, identify, and allocate suitable land for different housing types based on local demand and development needs.

Second, with respect to stalled projects, a number of mechanisms have been introduced to address obstacles related to compensation and site clearance. In practice, many projects have completed more than 70 per cent of compensation work but have been unable to move forward due to procedural difficulties. The introduction of these measures has enabled many real estate projects to resume implementation, helping increase market supply.

Third, on land pricing policy, the previous requirement to determine land values on a project-by-project basis created significant challenges for investors in managing timelines, cash flow, and investment costs, while also resulting in large disparities between projects. New regulations now allow the application of land price tables combined with land price adjustment coefficients in certain cases, helping simplify procedures, improve transparency, and create a more predictable investment environment. For social housing projects, exemptions from land-use fees remain an important policy tool to reduce development costs and support growth in this segment.

We view rental housing as a particularly important segment. At this stage, developing rental housing should be regarded as a priority, a key pillar and a major growth driver for the future direction of Vietnam’s housing and real estate market.

In my view, one of the biggest challenges today is that we have not yet fully identified the role, scale and actual demand for rental housing within the broader housing market. Therefore, it is important to conduct a comprehensive nationwide assessment of rental housing demand as soon as possible. This would provide the basis for local authorities to allocate land, prepare planning frameworks, and introduce appropriate policies to support the sustainable development of the sector.

There are two areas where pilot rental housing programs could be prioritized. The first is in city centers and Transit-Oriented Development (TOD) areas, where large numbers of young professionals, skilled workers, and experts are concentrated. Land for such projects could be supported through preferential policies, including reduced or zero land-use fees, to attract private investment.

The second is rental housing in industrial parks, targeted at workers on modest incomes. This segment has significant potential to improve living conditions for workers while supporting workforce stability and economic development.

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First and foremost, rental housing is an essential segment in the current context. However, from a legal perspective, the regulatory framework governing this segment remains incomplete.

Associate Professor Nguyen Quang Tuyen, Dean of the Faculty of Economic Law at Hanoi Law University and Arbitrator at the Vietnam International Arbitration Centre (VIAC)

The National Assembly has adopted several relevant resolutions, but a key issue remains: how rental housing should be formally defined within the legal system. Without a clear legal definition, it will be difficult to design appropriate policies and management mechanisms. At present, the Law on Housing 2023 contains a dedicated chapter on social housing, but there is no comprehensive and separate framework governing rental housing. This legal gap should be addressed as soon as possible.

Therefore, during the planned amendments to the Land Law 2024, the Law on Housing 2023, and the Law on Real Estate Business 2023 this year, I believe it is necessary to introduce at least one dedicated chapter or a specific set of provisions governing rental housing. This would help complete the legal framework and create a foundation for the systematic and sustainable development of the sector.

In addition to general provisions on land access, there should be stronger incentive mechanisms that make it easier for businesses to access land and develop rental housing projects.

Another important issue is planning. The government should clearly assign responsibility to local authorities for preparing land reserves specifically designated for rental housing. At the same time, legislation should specify the proportion, location, and allocation criteria for such land reserves to ensure transparency and consistency in implementation. This is a matter of particular concern to the business community.

It is also necessary to clarify mechanisms for exemptions and reductions of land rental fees, as well as the State’s responsibility in facilitating land access for developers of rental housing projects. Only when input costs are kept at reasonable levels can rental prices remain affordable for tenants, thereby supporting the sustainable development of the sector.

A key question is whether the current Land Law clearly defines the responsibilities of local authorities in land clearance and site preparation to create clean land funds for rental housing development.

In practice, existing regulations remain relatively general and do not clearly distinguish or specify these mechanisms.

In addition, it remains unclear what specific incentives exist regarding land-use rights and obligations for rental housing developers compared with other forms of real estate development. This is widely regarded as one of the major implementation bottlenecks.

For tenants, greater legal clarity is also needed regarding their rights and protections, including occupancy rights, lease terms, administrative procedures and dispute-resolution mechanisms. Currently, these matters are largely governed by general regulations rather than provisions tailored to the specific nature of rental housing.

In my view, these issues should be studied carefully and incorporated into the law through a more comprehensive and coherent framework. Only then will businesses have the confidence to invest, and only then can the rental housing market develop in a truly sustainable manner.

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Ibelieve rental housing is often treated as a special segment, but in reality it is not fundamentally different from what already exists in the market. Today, rental activity spans the entire housing spectrum, from luxury apartments and commercial housing to studio units and informal rental properties along the Red River. Rental housing is already an integral part of Vietnam’s real estate market.

Dr. Ngo Trung Hai, Vice Chairman of the Vietnam Urban Planning and Development Association

Any market is ultimately driven by supply and demand. There must be landlords willing to rent out properties and tenants willing to lease them. Therefore, an important question is whether Vietnam truly needs a separate legal framework dedicated solely to rental housing.

In my view, the more important issue is how urban space is organized and how appropriate development mechanisms are designed. In China, for example, authorities have introduced the R4 land-use category, which is specifically designated for long-term rental housing developed and operated by private investors. Modern urban planning also no longer draws rigid distinctions between commercial housing, social housing, and rental housing. Instead, the focus is on ensuring that all urban residents have equal access to quality housing services. A well-integrated mix of housing types can help create more livable and inclusive cities.

Transit-Oriented Development (TOD) linked to metro systems presents a particularly significant opportunity for commercial housing, social housing, and rental housing alike. In practice, demand for rental housing around TOD hubs is substantial. Along the Ben Thanh - Suoi Tien Metro Line in Ho Chi Minh City, for example, many students and lower-income residents rely on the system and represent a strong potential tenant base.

However, relatively few developers remain genuinely interested in rental housing projects. This raises an important question: to what extent should the State intervene?

Japan’s experience offers useful lessons. There, developers are given considerable autonomy in TOD projects while being encouraged to allocate a certain proportion of development to rental housing, social housing, and commercial housing.

I believe developers can successfully invest in rental housing and generate reasonable returns, much as has been done in China. Such an approach would help gradually build a more stable, sustainable and self-regulating real estate market, rather than one that alternates between periods of excessive expansion and abrupt slowdowns.

I am not pessimistic about Vietnam’s real estate market. However, we should be mindful of the risk of creating cities that lack vibrancy; places where housing units are sold but remain largely unoccupied, leaving neighborhoods dark and inactive at night.

For *that reason, the most important question is determining the appropriate balance between rental housing and other housing segments. This is an issue that both policymakers and developers must carefully assess based on the specific characteristics and needs of each city.

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In the past, homeownership was widely viewed as a prerequisite for stability and career success. Today, however, the labor market has changed significantly. Previous generations often spent their entire careers with one employer, making homeownership central to “settling down.” Younger generations are more mobile, frequently changing jobs and locations to pursue new opportunities.

Professor Hoang Van Cuong, Vice Chairman of the State Council for Professorship and Vice Chairman of the Vietnam Economic Association

As a result, being tied to a home purchased years earlier can be less practical than renting, which offers greater flexibility. Rental housing allows people to live closer to work, move between neighborhoods, and adjust their housing arrangements as their needs evolve. Young couples and financially-independent single adults are increasingly choosing to live separately from their parents before they have accumulated enough savings to buy a home.

Renting also helps avoid the burden of long-term mortgage debt. Many homeowners spend decades repaying housing loans, limiting their ability to invest in other aspects of their lives. Consequently, demand for rental housing is rising rapidly, particularly in major cities, making it an increasingly important component of urban development.

Given these realities, Vietnam needs a comprehensive strategy for developing the rental housing market. If rental housing is to become a sustainable segment, it will require both public and private sector participation.

If the State acts alone, resources will be insufficient and long-term operation and maintenance may be difficult to sustain. Conversely, if the market is left entirely to private investors under current conditions, rental housing cannot effectively compete with housing developed for sale. Development costs are high, while rental income is often insufficient to cover financing costs, let alone recover the initial investment. This makes State leadership particularly important.

The government should play a central role in urban planning by allocating land for rental housing in areas close to city centers, with good transportation links but lower commercial value.

Classical urban development theories suggest that the most commercially-valuable central areas should be reserved for business and service activities, while nearby areas with lower commercial value are better suited to high-density residential developments that meet rental housing demand.

This approach aligns with the evolution of mature real estate markets. During periods of rapid expansion, developers tend to build homes for sale because capital can be recovered quickly. As markets mature and land becomes scarcer, investment increasingly shifts toward generating long-term income from existing assets, creating natural conditions for a larger rental housing market.

For this reason, rental housing policies should initially focus on major urban centers where demand is strongest. Suitable land should be allocated in locations supported by quality infrastructure, public services, and convenient transportation.

Land costs are another critical issue. Land-use fees often account for a significant portion of development costs, particularly in central urban areas. To reduce financing burdens, land-use payments for rental housing should shift from large upfront payments for permanent residential land rights to annual land rental payments.

For the rental housing market to develop effectively, coordinated reforms are needed across legal, land-use and investment policies. The goal should be to create rental communities that offer quality living environments, comprehensive amenities, and genuine long-term value, rather than serving merely as temporary accommodation for those unable to purchase homes.

If Vietnam can implement a coordinated strategy, rental housing can become a major and sustainable pillar of the country’s real estate market in the years ahead.

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Following the administrative merger, the new Ho Chi Minh City is home not only to nearly 3 million migrants already residing in the city but also to more than 1.2 million migrant workers from former Binh Duong province. As many as 974,000 people are estimated to need social housing through purchase, lease, or lease-to-own schemes. However, during the 2021-2025 period, only 17,902 social housing units were completed.

Mr. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association

The social housing development target for 2026-2030 is 181,498 units. Even if the city succeeds in delivering 199,400 social housing apartments by 2030, supply will still fall short of the housing needs of workers and low-income urban residents, particularly in the rental segment.

To encourage greater private sector participation in the development of affordable rental housing, the Association proposes incorporating a dedicated policy framework for “rental housing affordable to middle and low-income urban residents” into the amended Law on Housing and related legislation.

This framework should include exemptions from land-use fees and land rental payments for land acquired by developers through negotiated transfers for affordable rental housing projects. These incentives should apply throughout the entire life cycle of the project.

Affordable rental housing projects and social rental housing projects typically require at least 20 years to recover investment costs. Therefore, projects should be required to maintain rental operations for a minimum of 20 years in order to qualify for preferential policies. Such a requirement would align incentives with the long-term nature of these developments and ensure consistency throughout the project’s life cycle.

The Association proposes reinstating the policy of reducing value-added tax and corporate income tax rates by 70 per cent for developers of social rental housing projects and affordable rental housing developments. Relevant tax legislation should also be amended to further reduce development costs and rental prices.

In addition, the Association recommends that the State regulate only the maximum rental rate for affordable rental housing projects, similar to the existing framework for social housing rentals. Developers should retain the right to determine tenant eligibility for affordable rental units within their projects.

The Association further proposes amending the Law on Housing and related regulations to establish minimum standards for studio apartments and rental units, with a minimum floor area of no less than 15 sq m. This would facilitate the development of small rental apartments that are better suited to single-person households, two-person households, and changing demographic trends.

The outlook for Vietnam's banking sector in 2026 presents a notable paradox: despite mounting liquidity pressures, narrowing net interest margins (NIMs), and rising funding costs, many banks are still expected to deliver double-digit profit growth, with some forecast to double their earnings.

Unlike previous years, the key driver of bank profitability in 2026 is no longer NIM expansion. Instead, the industry's performance increasingly depends on a "VIP pass" known as credit growth quotas, along with specific asset-related catalysts.

The latest reports from Saigon Securities Inc. (SSI), MBBank Securities (MBS), Vietcombank Securities (VCBS), and An Binh Securities (ABS) all maintain a positive outlook for the banking sector this year.

SSI recently raised its forecast for industry-wide pre-tax profit growth to 17.6%, up from its previous estimate of 17%. Similarly, ABS expected the banking sector's profits to grow by around 18%.

However, behind these encouraging growth figures lies mounting operational pressure. According to several securities firms, the banking industry's narrative has shifted significantly in 2026.

While the 2023-2025 period was primarily driven by NIM recovery amid low interest rates, this year's focus has shifted toward cost control, expanding non-interest income, and leveraging policy advantages.

MBS recently issued a noteworthy warning that the gap between system-wide credit growth and deposit growth has exceeded VND1,400 trillion ($53.22 billion). This indicates that lending is expanding considerably faster than deposits from households and economic organizations.

As a result, liquidity pressure is expected to intensify during the second half of the year. To secure funding, many banks will likely raise deposit interest rates, causing funding costs to increase more rapidly than previously anticipated.

South Korean bank Shinhan believes the impact of higher interest rates will gradually become more apparent in the remaining quarters of the year. As funding costs rise while lending rates cannot be increased proportionately, many banks' NIMs are expected to continue narrowing. This is also why MBS has revised its banking sector profit growth forecast downward to around 18%, below earlier optimistic projections.

A widening divergence among banks has also become increasingly evident. While some lenders are expected to maintain profit growth exceeding 20%, others may record only single-digit growth or remain largely flat compared with the previous year.

The common characteristic among the banks expected to achieve the strongest earnings growth is their higher credit growth quotas.

Following their participation in restructuring weak financial institutions through the compulsory transfer mechanism, several banks have been granted significantly higher credit growth limits by the State Bank of Vietnam than the industry average. This has become the most important competitive advantage in an environment where sector-wide NIM remains under pressure.

VCBS expects MBBank to be one of the biggest beneficiaries of this policy. Its 2026 pre-tax profit is projected to reach VND42.76 trillion ($1.63 billion), representing growth of 20-21% year-on-year. The primary driver is annual credit growth that could reach as high as 35%, substantially outperforming the industry average.

Similarly, HDBank is expected to benefit significantly from the policy. VCBS forecasts the bank's 2026 pre-tax profit at nearly VND28.73 trillion ($1.09 billion), an increase of 35-36%. Besides its credit growth advantage, HDBank is also expected to benefit from its acquisition of Vikki Bank and the planned IPOs of subsidiaries HD Securities and HD Saison.

VPBank is also viewed positively thanks to its higher credit quota and the recovery of its retail banking business. VCBS projects the bank's whole-year profit to grow by approximately 22.4%, supported by contributions from its subsidiaries FE Credit and VPBankS.

According to analysts, as NIM continues to decline, expanding interest-earning assets has become the decisive factor for profitability. In other words, banks with larger credit growth quotas can offset lower lending margins by increasing loan volumes, thereby sustaining earnings growth.

Multi-trillion-VND earnings beyond core operations

In addition to favorable credit policies, several banks are expected to generate exceptional earnings from non-core income sources.

The most notable example is Sacombank. VCBS forecasts the bank's 2026 pre-tax profit at over VND15.23 trillion ($578.97 million), representing a remarkable 100% increase from the previous year.

The primary catalyst is the completion of its long-running bad debt resolution process, particularly involving collateral assets and legacy loans accumulated during its restructuring program.

MSB is also viewed as a bank capable of delivering significant upside surprises. Its 2026 pre-tax profit is forecast to reach VND 8.61 trillion ($327.3 million), up 22%. According to VCBS, the bank could recognize an additional VND1-1.5 trillion ($57 million) in earnings from debt recoveries and provision reversals during the second half of the year.

Meanwhile, VietinBank is expected to benefit from the transfer of the VietinBank Tower project. The transaction could generate approximately VND5 trillion ($190.07 million) in one-off profit if completed on schedule.

VCBS forecasts VietinBank's Q2 pre-tax profit at around VND15 trillion ($570.21 million), up 24% year-on-year, while full-year profit is expected to increase by approximately 20.6%.

Analysts believe these banks are particularly attractive to cash flow because their earnings outlook depends not only on traditional lending activities but also on unique earnings catalysts.

Another notable trend highlighted by MBS is the changing composition of credit growth.

Corporate lending has become the primary growth engine for the banking system. In particular, commercial real estate lending has expanded by 11.7% compared with the end of last year, supported by the resolution of legal obstacles affecting numerous property projects.

By contrast, retail lending continues to face greater challenges. Higher lending rates resulting from increased funding costs have slowed the recovery in demand for mortgages, consumer loans, and loans to household businesses.

This explains why many banks traditionally focused on retail banking have experienced slower profit growth.

VCBS forecasts that Vietnam International Bank's (VIB) Q2 profit will increase by only about 5% year-on-year to VND2.73 trillion ($103.79 million). Rising funding costs are placing considerable pressure on the bank's profitability.

Likewise, banks such as Asia Commercial Bank (ACB), Techcombank, and Vietcombank are expected to maintain stable earnings growth but are unlikely to deliver the sharp profit acceleration anticipated for banks benefiting from compulsory transfer policies or unique asset-recovery stories.

As NIM continues to narrow, competition within the banking sector is increasingly shifting toward cost optimization and operational efficiency.

MBS forecasts that MBBank will continue to lead the industry in return on equity (ROE), with an estimated 20.2%. Its advantages include a high CASA ratio, low funding costs, and strong risk management capabilities.

The next group consists of VIB (17.5%), ACB (17.2%), Vietcombank (16.9%), TPBank (16.9%), and VPBank (16.9%).

According to MBS, banking sector valuations remain below their five-year average, creating attractive long-term stock accumulation opportunities for investors.

However, rather than favoring highly speculative stocks, MBS recommends CTG of VietinBank, ACB, and VPB of VPBank for investment portfolios in the second half of 2026, citing their balanced combination of earnings growth, asset quality, capital strength, and attractive valuations.

Overall, 2026 marks a period of significant divergence within Vietnam's banking sector. While banks enjoying the "VIP pass" of generous credit growth quotas or possessing unique asset-recovery opportunities continue to accelerate, many others are adopting more defensive strategies in response to increasing liquidity pressure and rising funding costs.

As a result, this year's profit race is no longer an industry-wide story but rather a competition among banks with the strongest policy advantages, superior asset positions, and the greatest ability to adapt to the new interest-rate environment.

Vietnam expects to have 5,000 kilometers of expressways by 2030.

Prime Minister Le Minh Hung has requested relevant ministries, agencies and localities to speed up progress of key infrastructure projects, while chairing a meeting of the State Steering Committee for key national projects in the transport sector in Hanoi on June 27.

The Government has identified 38 key projects with total investment capital of around VND5 quadrillion (around $190 billion) for the five-year period of 2026-2030. In 2026 alone, the Government has allocated VND220 trillion for these projects.

The PM requested the Ministry of Finance and the Ministry of Construction to strengthen supervision of airport construction projects, including Long Thanh International Airport in southern Dong Nai city, and Gia Binh airport in northern Bac Ninh province.

He tasked the Ministry of Construction to promptly select foreign contractors and consultants to carry out the feasibility study report for the North-South high-speed railway project.

The Ministry of Finance, the Ministry of Construction, and the State Appraisal Council were tasked to organize the verification of the feasibility study report for the Lao Cai-Ha Noi – Hai Phong railway project and submit to the National Assembly Standing Committee prior to July 10, 2026.

The progress of these projects will be made public via the Vietnam Government Portal, according to the PM.

By 2030, Vietnam expects to have 5,000 kilometers of expressways.