Vietnam is undergoing significant transformation. With its booming economy and aspirations to become a developed high-income nation by 2045, urbanization is unfolding at an unprecedented rate.

 Cities like Hanoi and Ho Chi Minh are swelling with new residents, drawn by the allure of better employment opportunities and living conditions. However, with this swift urban influx comes a multitude of challenges, most notably in housing. Let’s delve into the data and specifics of Vietnam's urbanization and its accompanying housing crisis.

Vietnam’s Skyrocketing Urban Growth

Urbanization Rate

Vietnam’s urban population in the early 1980s was roughly 20%. Fast forward to the present times, and it's surged to over 37%. By 2045, the United Nations projects that more than half of Vietnam’s populace will reside in urban areas.

City Expansion

Major cities are experiencing growth both in population and land area. For instance, Ho Chi Minh City's population ballooned from 5 million in 1990 to over 9 million in 2021.

The Housing Dichotomy: Overcrowding and Vacancy

Slums and Overcrowding

With rapid city expansion comes the proliferation of informal settlements. Over 30% of urban residents in Vietnam live in overcrowded conditions. Access to clean water, sanitation, and stable electricity can become hard for some.

Vacant Properties

Paradoxically, while many scramble for housing, Vietnam’s urban areas have a high percentage of vacant properties, especially near Hanoi and Ho Chi Minh City. These are typically high-end apartments, out of reach for the average citizen, which creates a scenario where the rich have multiple homes, and the poor have none. Also, some housing projects are built far away from the main city, making it time-consuming and expensive to travel to and fro from workplaces.

The Financial Strain of Housing

Skyrocketing Prices

Real estate prices in major Vietnamese cities have surged in recent years. The price of apartments in central areas of Ho Chi Minh City has jumped by over 90% between 2015 and 2020. For many Vietnamese, these prices make homeownership an unattainable dream.

Rent Troubles

While owning a home is expensive, renting isn’t much better. A 2020 survey found that urban residents typically spent 20-30% of their income on rent. This is particularly troubling for low-income families and migrant workers who might not have a stable income.

Government Initiatives

Affordable Housing Projects

Recognizing the pressing need, the Vietnamese government has initiated various affordable housing projects. Between 2015 and 2020, over 1 million affordable homes were planned. About 30% of these homes have been being built by 2021.

Land Laws

Land in Vietnam belongs to the people as a collective, and the state administrates on their behalf. However, the allocation of land for housing projects often gets entangled in bureaucratic red tape. Land designated for affordable housing may get rerouted to commercial projects if financial need arises.

Path Forward: Solutions to Consider

Integrated Urban Planning

An integrated approach to urban planning that considers transportation, public spaces, and housing can lead to more sustainable city growth. This includes the creation of satellite cities around major urban hubs to distribute population density.

Public-Private Partnerships (PPP)

Engaging private players in the housing sector can increase the pace of housing project completion. PPP models, where the government provides land or incentives and private players undertake construction, can ensure quality and timely delivery.

Housing Cooperatives

Housing cooperatives, where communities come together to build and manage housing projects, can be a solution for the middle and low-income segments. This model has worked in other countries and can be adapted to Vietnam’s context.