Vietnam needs government funding for rental housing, experts say

Developing a robust rental housing market in Vietnam requires a significant shift in funding strategies, moving away from an over-reliance on preferential credit packages towards government investment and bonds. This was a key takeaway from the Vietnam Real Estate Forum 2026, held in Hanoi and organized by the Vietnam Institute for Real Estate Research and Vietnam Real Estate Magazine.

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Many countries around the world use government resources to develop rental housing. Vietnam wants to form a foundation for rental housing in the next 10 years, meeting real housing needs, by using public investment capital and government capital, rather than relying too much on preferential credit packages.

Le Xuan Nghia, a member of the National Financial-Monetary Policy Consultative Council, pointed out that many countries utilize government resources to foster rental housing. He argued that Vietnam should follow suit, using public investment and government funds to build a foundation for rental housing over the next decade. Nghia cited the slow disbursement of a 145 trillion dong preferential credit package for social housing, which has only seen about 2% utilized. He explained that businesses struggle to access loans at the regulated 6.1% interest rate when banks' own capital mobilization costs are between 7-8%, making long-term, low-interest lending difficult for banks, which are also businesses.

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The preferential credit package of 145 trillion VND for social housing has only disbursed about 2% so far. Businesses find it very difficult to access loans at the regulated interest rate of 6.1% because the banks' capital mobilization costs are already at 7-8%.

Nghia proposed that government bonds are a viable solution, capable of raising long-term capital at lower interest rates of 3-4% for approximately 20 years. This would provide the necessary stability and scale for rental housing development. Additionally, experts recommended a model where the state prepares land, resources, and planning, while the private sector handles construction and operation, ensuring professionalism and efficiency.

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Government bonds are the only way to mobilize long-term capital at an interest rate of 3-4% for about 20 years.

Nguyen Van Sinh, Deputy Minister of Construction, confirmed that the 2023 Housing Law introduced a dedicated chapter on rental housing, aimed at promoting its development in industrial zones. He noted that many industrial parks have already established housing for workers, especially those with foreign investment, accommodating large numbers of experts and laborers. This has spurred the growth of multi-story apartment buildings offering various rental units. The law also encourages private investment in rental housing to serve diverse groups, including workers, experts, and temporarily relocated officials, with flexible land and rental mechanisms being designed.

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The 2023 Housing Law has added a separate chapter on rental housing to promote the development of this type of housing in industrial zones.