Rethinking housing as infrastructure amid rising home prices

Rising housing prices are prompting countries to treat housing as essential infrastructure within urban development strategies, with the aim of supporting not only shelter needs but also broader economic and social growth. However, cost pressures are still building: housing and construction-related prices increased in Q1 2026, adding strain to living costs and testing affordability.

Housing and construction costs rise in Q1 2026

In the Q1 2026 socioeconomic report from the General Statistics Office (Ministry of Finance), the price index for the housing, building materials, electricity, water and fuel group rose 0.77% in March 2026.

• Rents increased 0.94%
• Domestic repair services rose 1.2%
• Home maintenance materials grew 1.58%

For Q1 2026 overall, the housing and building materials price index rose about 5.69% year-on-year. Within this, rent increased 6.55%, reflecting higher maintenance and operating costs, while home maintenance materials costs rose 12.26% due to input costs and rising construction and repair demand.

Affordability concerns grow among buyers

These developments are putting pressure on living costs and investment decisions, particularly for middle- and low-income groups. Many residents say rent increases and house price levels are outpacing income growth.

Anh Minh (32), who works in technology in Hoang Mai District, said his family’s plan to buy a home has been postponed indefinitely. “Each time rent goes up a little, all calculations are overturned. Income does not rise fast enough, while house prices always move ahead a step,” he said, adding that buying a home in Hanoi is becoming increasingly difficult for young people.

Ms. Lan (29), a communications staffer in Cau Giay, said the prospect of buying a home in Hanoi is slipping further away. “Even after years of saving and considering additional borrowing, the current price level still exceeds affordability. After learning about the gap between income and house prices, I did not dare to invest,” she said.

Market data: apartment prices increase in Hanoi and HCMC

From a market perspective, Alex Crane, CEO of Knight Frank Vietnam, said that in Q1 2026 the average price of primary apartment sales in Hanoi reached 112 million VND per m2, up about 38% year-on-year. In Ho Chi Minh City, the figure was 107 million VND per m2, up 11.8%.

Crane said price growth is expected to continue this year due to input cost pressures, while new supply remains constrained. He also noted that real demand—especially in mid- and lower-cost segments—remains high.

“Infrastructure-izing” housing to unlock long-term capital

Neil MacGregor, CEO of Savills Vietnam, argued that housing policy is shifting globally toward repositioning housing as a form of infrastructure. In this approach, housing becomes part of long-term urban development planning, linked to infrastructure and financial policy, rather than being treated only as a short-cycle investment.

MacGregor said this model can help unlock capital. While many housing projects have short investment cycles, investors often prefer stable cash flows over 20–30 years. “Infrastructure-izing” housing, he said, can narrow the gap and mobilize long-term capital that has not been tapped effectively.

He pointed to Singapore as an example, where social housing is integrated into national infrastructure planning, enabling more than 80% of residents to access quality housing. By contrast, cities such as London or New York still face supply targets that are difficult to meet due to costs, legal obstacles, and capital flow constraints.

Vietnam’s policy shift and the role of new regulations

For Vietnam, MacGregor said the country is at a turning point as foundational factors converge. “The government continues to push growth and focuses on removing bottlenecks in the market. Legal reforms and strong infrastructure investment will be keys to improving supply in the coming years,” he said.

Savills also noted that from 2026, the market will operate under new regulations and updated land pricing. While these changes may raise costs in the short term, shifts in expectations could create a more transparent and consistent environment—particularly in determining land prices and project approvals, two factors that constrain supply.

Long-term outlook: more sustainable supply and better access

In the long term, housing planned and developed alongside infrastructure can expand supply more sustainably while improving access for real buyers. MacGregor concluded that Vietnam’s housing challenges align with global trends, but also create opportunities to move faster if the right path is chosen—shifting from short-term development toward a long-term strategy that treats housing as infrastructure to better meet real demand.