A NEW PRICE BENCHMARK FOR INNER-CITY SOCIAL HOUSING: INSIGHTS FROM THE HUD THU DUC PROJECT

1. HUD THU DUC AND THE SOCIAL HOUSING PRICE EXCEEDING VND 30 MILLION/M²

Ho Chi Minh City’s real estate market is under significant pressure to meet the social housing (social housing – SH) development targets set under the Government’s housing program. Recently, the Ho Chi Minh City Department of Construction and the Housing and Urban Development Corporation (HUD) announced information on a social housing project located on a land parcel within Residential Area No. 6 (Residential Area – Hiệp Bình Phước Entertainment Park), Hiệp Bình Phước Ward, Thu Duc City. The site is part of the 20% land allocation reserved for social housing development within the larger Hiệp Bình Phước Residential Area – Entertainment Park project (Vạn Phúc City).

The project comprises 209 apartments, broke ground on August 19, 2025, and is scheduled for handover in the third quarter of 2027, according to the developer’s announcement. The most notable point is the provisional selling price of VND 30.7 million/m², inclusive of VAT but exclusive of the 2% maintenance fund contribution.

1.1. 209 apartments, with prices of up to more than VND 2.1 billion per unit

All 209 apartments in the project are social housing units offered for sale. Of these, 45 apartments have a floor area of approximately 53.5 m², while 164 apartments measure approximately 69.5 m².

At the provisional price of VND 30.7 million/m², apartment prices range from approximately VND 1.64 billion to more than VND 2.13 billion per unit, excluding the 2% maintenance fund contribution.

This represents a significantly higher price level than the traditional social housing market in Ho Chi Minh City, where prices have typically ranged between VND 15 million and VND 20 million/m², and is also considerably higher than prices at many projects in surrounding areas.

1.2. Project scale and the land-use efficiency equation

The project occupies a 13,707 m² site, with a building footprint of 5,843 m², a total gross floor area of 30,770 m², and a seven-storey building comprising a two-storey podium and five residential floors.

The floor area ratio (FAR) is estimated at approximately 2.25, while the site coverage ratio is around 42.6%. The project is expected to begin accepting applications in the fourth quarter of 2026 and to be completed and put into operation in the third quarter of 2027.

2. BREAKING DOWN THE VND 30.7 MILLION/M² PRICE

The price of the HUD Thu Duc project should not be viewed solely from the perspective of the selling price, but rather in the context of its cost structure and planning characteristics.

2.1. Rising input costs are pushing up the price benchmark

In the past, social housing in Ho Chi Minh City was generally positioned below VND 20 million/m². Some recent projects, such as the Ly Thuong Kiet social housing project, have been approved at around VND 23.2 million/m², while projects in the former Binh Duong area have ranged from approximately VND 19.8 million to VND 22 million/m².

The VND 30.7 million/m² benchmark at HUD Thu Duc reflects an adjustment in development costs in response to construction costs, financing expenses and material price fluctuations during the current cycle.

Under the Housing Law, social housing selling prices are determined on a cost-recovery basis, including reasonable construction investment costs, compensation and infrastructure costs where applicable, and a prescribed profit margin of no more than 10%.

Against a backdrop of rising material and labor costs, higher financing expenses and stricter technical requirements—particularly fire prevention and firefighting (PCCC) standards—the cost of developing social housing is becoming increasingly difficult to maintain at the low levels seen in previous periods.

2.2. Low-rise planning increases the development cost per unit

Unlike many social housing projects optimized for 18–25-storey buildings in order to spread land, foundation and infrastructure costs across a larger number of apartments, HUD Thu Duc is only seven storeys high, with the residential component occupying just five floors.

The relatively low site coverage ratio and floor area ratio are constrained by the detailed 1:500 master plan for the Vạn Phúc/Hiệp Bình Phước residential area.

The restriction on building height and overall development scale is one of the factors affecting the project’s ability to achieve economies of scale, potentially increasing the development cost per unit of floor area.

2.3. VND 30.7 million/m² remains a provisional price

It is important to note that VND 30.7 million/m² is not yet the final selling price. This is a provisional price calculated and announced by HUD.

The official contractual selling price must go through the valuation and review process by the relevant state authorities before the developer can formally announce it.

3. HIGHER SOCIAL HOUSING PRICES, BUT A CLEAR LOCATION ADVANTAGE

With apartment prices ranging from approximately VND 1.6 billion to more than VND 2.1 billion, the HUD Thu Duc social housing project is approaching the price level of commercial apartments in some outer urban areas. However, its location provides a significant advantage in terms of market absorption.

3.1. A significant price gap with commercial housing

The project is located adjacent to National Highway 13 and the Vạn Phúc urban area, where commercial apartment prices in the surrounding area currently range from approximately VND 60 million to VND 100 million/m².

Therefore, although the VND 30.7 million/m² price is considerably higher than the traditional social housing benchmark, the project still offers a substantial price discount compared with nearby commercial apartments.

As a result, market absorption is expected to be strong. The greater challenge lies in verifying applicants and selecting buyers who fully meet the eligibility requirements for social housing under current regulations.

3.2. Access to financing is becoming increasingly important

When the value of an apartment exceeds VND 2 billion, buyers must not only meet the eligibility criteria for purchasing social housing but also have sufficient equity and the capacity to service long-term debt.

This indicates that social housing in locations close to the urban core is gradually shifting from the concept of “low-cost housing” toward “policy-supported affordable housing that still requires significant financial capacity.”

4. SUPPLY PRESSURES CREATE NEW CHALLENGES FOR DEVELOPERS

Under the Government’s program to develop at least one million social housing apartments for low-income people and industrial workers during the 2021–2030 period, approved under Decision No. 338/QD-TTg dated April 3, 2023, Ho Chi Minh City has been assigned a target of approximately 69,700 social housing units during 2021–2030, including approximately 43,500 units during 2026–2030.

4.1. The 20% land allocation is becoming an increasingly important source of supply

The pressure to accelerate supply is forcing the 20% land allocations reserved for social housing within commercial urban developments to be brought into development more quickly.

The HUD Thu Duc case demonstrates that developing social housing on land with existing infrastructure can provide better access to established urban areas. At the same time, such projects must comply with planning constraints and prescribed building forms.

4.2. Cash flow is becoming a decisive factor

The period from the project’s groundbreaking in August 2025 to the expected opening for applications in the fourth quarter of 2026 spans more than a year. During this period, the developer must finance construction before it can collect payments from buyers in accordance with the permitted payment schedule.

The period from application intake to the expected completion in the third quarter of 2027 also places significant pressure on project delivery.

With a prescribed profit margin capped at 10%, social housing developers cannot compete on high returns. Instead, they must focus on cost management, construction speed and access to preferential credit facilities.

4.3. Transparency in the application process is critical

Under current regulations, information on the opening of sales and the acceptance of applications must be publicly disclosed before applications are received. This helps prevent practices such as collecting deposits to reserve units, charging price premiums or offering so-called “VIP allocations” before a project is legally eligible for sale.

For projects with a large price gap between social and commercial housing in the same area, controlling brokerage activities and ensuring accurate market information also become important aspects of the developer’s risk management and reputation.

5. WHAT DOES HUD THU DUC SIGNAL FOR THE 2026–2030 SOCIAL HOUSING CYCLE?

5.1. Inner-city social housing prices may struggle to return below VND 25 million/m²

A comparison with social housing projects such as Ly Thuong Kiet, projects in the former Binh Duong area and developments farther from the urban core shows an increasingly pronounced price gap.

The VND 30.7 million/m² price at HUD Thu Duc could signal that social housing in locations close to the urban core will find it increasingly difficult to remain below VND 25 million/m² as construction costs and compliance costs continue to rise.

5.2. Planning and building form will directly affect development costs

The project occupies a 13,707 m² site but has a total gross floor area of only 30,770 m² and 209 apartments. This illustrates how low-rise planning can limit the ability to distribute development costs across a larger scale.

In comprehensively planned urban developments, social housing land must comply with prescribed building-height and site-coverage limits, which in turn have a direct impact on development costs.

5.3. Project delivery and financial capacity will become competitive advantages

With a target of 66,657 units during 2026–2027, pressure to accelerate social housing development will continue to intensify.

Developers will therefore need sufficient financial capacity to fund a substantial portion of construction costs upfront, while maintaining tight control over the entire process—from application intake and eligibility verification to project completion and handover.

5.4. The price gap increases the risk of policy abuse

The large gap between the VND 30.7 million/m² social housing price and the prices of adjacent commercial apartments creates a significant potential gain, which could encourage brokerage practices aimed at exploiting the policy.

Public disclosure of project information, standardized application procedures and warnings against impersonation, illegal price premiums and so-called “VIP allocations” are therefore not merely legal requirements but also important aspects of the developer’s reputation management.

CONCLUSION

The provisional price of VND 30.7 million/m² for the 209 apartments at HUD Thu Duc is more than a noteworthy figure for a single social housing project. It also provides an indication of the changing cost structure of policy-supported housing in Ho Chi Minh City.

As construction costs, technical standards, financing expenses and planning constraints increasingly influence development costs, social housing in locations close to the urban core is unlikely to maintain the low price levels seen in previous periods.

For developers, the challenge during the 2026–2030 cycle will not simply be to secure land and accelerate supply, but also to optimize planning, control costs, proactively manage cash flow and ensure legal and project-delivery timelines.

HUD Thu Duc can therefore be regarded as an important indicator of a new social housing price benchmark in major Vietnamese cities: higher prices and greater financial requirements, but also a development model that is more closely integrated with urban infrastructure and land-use efficiency.