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Vietnam is introducing tax measures to address soaring property prices and speculative activity in its housing market. Apartment prices increased 20-30% and land plots 20-25% last year, with average costs reaching around 100 million dong (USD 3,804) per square metre equal to a typical worker's annual salary. The government plans to promote fair housing access and fund social housing to build up to one million apartments for low-income residents by 2030. Policymakers also aim to regulate bank lending and risky property investments to ensure market stability.
Vietnam is moving to tackle rising property prices and speculation through new tax measures targeting the real estate sector. Investment in housing has become popular due to limited overseas investment options and rapid growth in government-supported bank lending. This has led to houses being bought and sold quickly, with many remaining vacant for long periods. Entire neighbourhoods in major cities have remained empty months after construction was completed. Advertisement
Prime Minister Pham Minh Chinh highlighted the need to ensure equal access to housing for all citizens and called for measures to cool home prices, particularly for apartments. He urged the finance ministry to provide sufficient funding for social housing programmes, aiming to build up to one million apartments for low-income residents by 2030. Earlier, he had also encouraged the construction of more homes to make housing more affordable.
Last year, apartment prices in Vietnam rose by 20-30% and land plots by 20-25%, according to the Ministry of Construction. In major cities, prices reached an average of 100 million dong (USD 3,804) per square metre, similar to the average annual salary of Vietnamese workers. Developers have mainly focused on high-end housing, further challenging affordability for ordinary buyers.
A Hanoi-based real estate broker said that speculation is hard to eliminate as investors consider property a safe channel. Strong measures against speculation could affect developers, who remain an important part of the economy. Meanwhile, the central bank announced plans to slow credit growth and tighten controls on loans to risky sectors, including real estate.
Shares of real estate companies have responded to these concerns. On the local stock market, Vinhomes dropped 5.2%, Kinhbac City fell 0.6%, and the broader real estate index declined 2.6%, reflecting investor caution. The government has not provided a timeline for implementing the new tax policies, which will likely be discussed further at the upcoming five-yearly congress of the ruling Communist Party.
Source Reuters
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