Vietnam’s Property Market in 2025: Trends, Forecast, and Key Growth Drivers

Key Takeaways

Vietnam’s property market in 2025 is poised for stable growth, supported by strong FDI, infrastructure upgrades, and a rising middle class.
Legal reforms and government incentives are unlocking new opportunities in residential, industrial, and hospitality sectors.
Strategic investments in green buildings, PropTech, and suburban developments are reshaping the real estate landscape for long-term gains.

Vietnam’s property market in 2025 stands at a defining crossroads, shaped by a confluence of transformative reforms, macroeconomic momentum, and evolving investor sentiment. Following years of turbulence driven by legal bottlenecks, capital constraints, and pandemic aftershocks, the nation’s real estate sector has entered a period of cautious optimism and strategic reconfiguration. With sweeping legislative changes taking effect—including the revised Land Law 2024, Housing Law 2023, and Real Estate Business Law 2023—Vietnam’s property landscape is undergoing a significant recalibration toward greater transparency, investor protection, and structural stability.

Vietnam’s Property Market in 2025: Trends, Forecast, and Key Growth Drivers

The forecast for 2025 and beyond signals the beginning of a new growth cycle, marked by rising liquidity in key metropolitan markets such as Ho Chi Minh City, Hanoi, and their adjacent satellite cities. The government’s continued prioritization of public infrastructure—ranging from national expressways and metro lines to new airports and digital connectivity—is expected to act as a powerful engine for both urban expansion and property revaluation. These infrastructure enhancements are not only reshaping regional accessibility but also redirecting capital flows toward emerging secondary markets and underdeveloped peri-urban zones.

Fuelled by strong macroeconomic underpinnings, Vietnam’s GDP is projected to grow by 5.2% in 2025, underlining the country’s resilience amidst global uncertainty. Simultaneously, its demographic dynamics provide a substantial tailwind. With a population surpassing 100 million and a youthful, urbanizing workforce, Vietnam boasts a “golden population structure” that continues to drive housing demand, retail expansion, and diversified real estate development. The rise of a tech-savvy middle class, expected to represent over 60% of the population by 2030, has fundamentally shifted consumer expectations—placing emphasis on quality living environments, integrated amenities, digital engagement, and sustainable urban planning.

Foreign Direct Investment (FDI) remains a pivotal growth driver for the sector. In 2024 alone, FDI disbursement reached an all-time high of $25.35 billion, with real estate ranking as the second most attractive sector. Industrial parks, logistics hubs, and high-end residential clusters catering to foreign professionals are flourishing, especially in provinces like Bac Ninh, Binh Duong, and Long An. Strategic alliances between international investors and domestic developers are further advancing standards of design, construction, and smart city integration.

Vietnam’s real estate sector is also experiencing a technological and environmental evolution. The rapid adoption of PropTech solutions and the acceleration of green building certifications—up 100% in 2024 alone—are evidence of a maturing market that values operational efficiency, environmental sustainability, and long-term asset resilience. From smart residential complexes and AI-powered leasing platforms to LEED-certified industrial and office buildings, technology and ESG principles are no longer optional; they are becoming essential for competitive positioning in 2025 and beyond.

Despite these strengths, challenges persist. Legal ambiguities surrounding land clearance, capital access hurdles, construction input inflation, and affordability crises remain critical headwinds. Property prices in major cities remain far beyond the reach of average income earners, underscoring the urgency for inclusive housing policies and diversified funding channels. A backlog of over 1,000 stalled projects—tying up more than $30 billion in capital—highlights the structural inefficiencies still constraining supply-side dynamics.

Yet, with the new legislative framework in place, combined with rising investor confidence and state-led infrastructure spending, the foundations are now stronger than ever for a more transparent, diversified, and sustainable real estate market. Vietnam’s property sector in 2025 is not merely poised for recovery—it is undergoing strategic transformation. The current cycle is less about speculative fervor and more about recalibrated growth anchored in real demand, policy support, and long-term value creation.

This blog explores in-depth the key trends, sectoral forecasts, growth drivers, and investment recommendations that are shaping Vietnam’s real estate sector in 2025. From residential and commercial developments to logistics, industrial zones, hospitality, and PropTech adoption, this comprehensive analysis aims to provide property developers, investors, policymakers, and stakeholders with actionable insights into the market’s evolution and the strategic imperatives needed to unlock its full potential.

Vietnam’s Property Market in 2025: Trends, Forecast, and Key Growth Drivers

Executive Summary
Vietnam’s Economic Foundation for Real Estate Growth
Legal and Policy Reforms: Shaping the Market Landscape
Residential Property Market: Dynamics and Outlook for 2025
Commercial Property Market: Office and Retail Sector Insights
Industrial Real Estate: A Pillar of FDI-Driven Growth
Hospitality and Tourism Real Estate: Rebound and Emerging Opportunities
Key Growth Drivers: Catalysts for Vietnam’s Property Market
Challenges and Risks: Navigating the Headwinds
Recommendations for 2025 and Beyond

1. Executive Summary

Market Overview: Vietnam Enters a New Property Cycle

Vietnam’s real estate market is witnessing a strategic inflection point in 2025, signalling a transition from short-term volatility to long-term structural recovery. The industry is entering a renewed development cycle, underpinned by macroeconomic resilience, regulatory modernisation, and targeted infrastructure spending.

Key Highlights:

A robust recovery observed in 2024 has laid the groundwork for moderate yet sustainable growth in 2025.
Liquidity is gradually returning to primary urban centres such as Ho Chi Minh City, Hanoi, and Da Nang, along with second-tier suburban zones.
Real estate developers are cautiously re-engaging the market, supported by policy clarity and investor optimism.

Macroeconomic and Legal Catalysts for Growth

Macroeconomic Foundations:

GDP Growth: Vietnam’s GDP is projected to grow at 6.3%–6.7% in 2025 (IMF estimate), reinforcing consumer confidence and real estate demand.
Middle-Class Expansion: A young and upwardly mobile demographic is accelerating urbanisation and residential upgrades.

Legal and Regulatory Reform Momentum:

The adoption of three pivotal laws is reshaping sectoral governance:
- Land Law 2024
- Housing Law 2023
- Real Estate Business Law 2023
These frameworks aim to:
- Enhance transparency and transaction security
- Clarify foreign ownership rights
- Resolve project-level legal bottlenecks

Segment-by-Segment Outlook for 2025

Segment	Performance Outlook	Key Growth Drivers
Residential	Bullish in Tier-1 and selected Tier-2 cities	Lagging new supply, rising middle-class demand
Industrial & Logistics	Strong and sustained FDI inflows	China+1 strategy, e-commerce growth, export manufacturing
Commercial (Office, Retail)	Gradual recovery underway	Business expansion, foreign enterprise re-entry
Hospitality & Tourism	Moderate rebound, still below pre-pandemic levels	Surge in international tourism and domestic travel demand

Key Drivers of Market Recovery and Expansion

Infrastructure and Connectivity Enhancements:

Mega-projects underway in 2025 include:
- North–South Expressway Expansion
- Long Thanh International Airport Phase I
- Metro systems in HCMC and Hanoi
Result: Improved inter-regional logistics and property value uplift along transit corridors

Digital Transformation & PropTech Integration:

Rapid adoption of:
- Online property listing platforms
- Smart property management systems
- Virtual home viewings and blockchain for title transfers

Sustainability and ESG Trends:

Growing demand for:
- Green-certified buildings
- Energy-efficient developments
- Low-carbon construction materials
This trend is shaping buyer preferences and institutional investor mandates

Structural Challenges Persisting in 2025

Despite forward momentum, several systemic challenges continue to hinder optimal market performance:

Supply and Affordability Constraints:

Shortfall in affordable housing, particularly in Greater HCMC and Hanoi
Persistent mismatch between property prices and median household incomes

Legal Delays and Procedural Bottlenecks:

Ongoing delays in project approval processes, despite legal reforms
Regulatory ambiguity still exists at provincial implementation levels

Financing and Credit Risk Exposure:

Heavy reliance on bank credit, with limited alternative financing
Elevated interest rates may pressure developer liquidity and buyer affordability

Comparative Price Trends by Region

Location	Average Residential Price (USD/m²)	Y-o-Y Change (2024–2025)
Ho Chi Minh City (CBD)	$4,000–$6,500	+5%
Hanoi (CBD)	$3,200–$5,500	+4%
Da Nang	$2,000–$3,500	+6%
Binh Duong / Long An	$1,200–$2,000	+7%

Source: Vietnam National Real Estate Association (VNREA), CBRE Vietnam 2025 Reports

Vietnam’s Property Market Outlook: Strategic Perspectives

2025 as a Transitional Year:

Market experts view 2025 as a base-building year rather than a return to pre-pandemic highs.
Gradual absorption of legacy inventories and legal reforms implementation will set the stage for 2026–2027 acceleration.

Strategic Recommendations for Market Stakeholders:

Developers should focus on mid-end and affordable housing to meet unmet demand.
Investors are advised to target industrial parks, suburban townships, and transport-linked zones.
Policy-makers must prioritise:
- Transparent land valuation mechanisms
- Encouragement of REITs and non-bank financing instruments
- Streamlining of project licensing procedures

Conclusion: A Foundation for Long-Term Equilibrium

Vietnam’s real estate sector in 2025 stands at a critical juncture. While full market normalisation remains a few years away, the current trajectory indicates a move toward greater maturity, resilience, and sustainability. The interplay of economic growth, legal clarity, and infrastructural momentum will shape the medium- and long-term outlook of the market. Addressing deep-rooted structural imbalances — particularly in supply and financing — will be instrumental in unlocking the sector’s full potential.

2. Vietnam’s Economic Foundation for Real Estate Growth

Post-2023 Economic Resilience: A Turning Point for Real Estate

Vietnam’s real estate sector is entering 2025 on the back of a notable economic rebound that gained momentum during the latter half of 2023 and accelerated through 2024. This macroeconomic resilience has laid the groundwork for a new development cycle, especially as sentiment among key stakeholders signals a collective shift from caution to optimism.

Market Sentiment Snapshot

Over 70% of property stakeholders in Ho Chi Minh City and more than 90% in Hanoi expressed positive expectations for market performance going into 2024 and beyond.
This optimism marks a psychological and financial pivot point, indicating broad consensus that the industry has moved past its cyclical bottom.

Macroeconomic Performance: A Multi-Year Growth Trajectory

Vietnam’s GDP performance over the last three years highlights the country’s structural strength and capacity for sustained expansion—critical to supporting real estate market fundamentals.

Year	Real GDP Growth (%)	Key Economic Drivers
2022	8.02	Post-COVID reopening surge, manufacturing exports
2023	5.05	Global slowdown impact, inflationary pressures
2024	7.09	FDI resurgence, trade recovery, services sector boom
2025*	5.2 (IMF est.)	Macroeconomic stability, industrial expansion

*2025 data sourced from IMF projections

Rising Incomes and Purchasing Power

One of Vietnam’s defining long-term economic achievements is the sharp rise in real GDP per capita—an indicator that directly influences domestic demand for property assets.

Real GDP Per Capita (USD, constant 2023 dollars)

Year	Per Capita GDP
1986	<$700
2023	~$4,500

This dramatic growth in household income is increasing:
- Urbanisation rates
- Middle-class formation
- Homeownership demand
- Commercial and retail space utilisation

Demand-Side Implications for the Real Estate Market

Vietnam’s expanding economic capacity is catalysing structural demand across real estate segments:

Residential Market

Improved household incomes are prompting demand shifts toward owner-occupied housing and condominiums in urban fringes.
Rising affluence has led to a widening affordability gap, with growing interest in mid-end and high-end segments.

Commercial & Retail Property

Service sector expansion—particularly financial services, logistics, and technology—is driving up demand for Grade A office spaces, especially in CBDs.
Retail space absorption is gaining momentum due to increased discretionary spending and rising tourism footfall.

Industrial & Logistics Zones

FDI-fueled growth in manufacturing, electronics, and supply chain operations is pushing demand for:
- Industrial parks
- Warehouse clusters
- Built-to-suit logistics hubs in proximity to major ports and expressways

Foreign Direct Investment as a Structural Demand Engine

Vietnam’s openness to trade and strategic location within global supply chains has attracted consistently high levels of FDI—directly influencing demand for commercial and industrial real estate.

Key FDI-Fueled Sectors in 2025

High-tech manufacturing (electronics, semiconductors)
Green energy (solar, wind, LNG infrastructure)
Digital infrastructure (data centers, logistics hubs)
Urban infrastructure (smart cities, transport corridors)

FDI inflows are not just capital injections; they also trigger ancillary demand for housing, offices, and mixed-use developments.

Vietnam’s Long-Term Growth Vision: Implications for Real Estate

The Vietnamese government has articulated a clear national ambition: achieving high-income country status by 2045. This development roadmap has direct consequences for real estate dynamics.

Key Targets and Impacts

Annual per capita GDP growth of ~6% is required until 2045
Long-term national planning includes:
- Expansion of urban housing stock
- Acceleration of infrastructure megaprojects
- Promotion of smart urban planning models

Strategic Vision Pillars	Real Estate Implications
High-income nation by 2045	Surge in demand for modern residential and commercial stock
Advanced industrial base	Expansion of smart industrial parks and SEZs
Green and digital transformation	Growth of green-certified buildings and PropTech adoption

Conclusion: Economic Fundamentals as a Pillar of Property Sector Stability

Vietnam’s economic trajectory through 2025 is not only supportive of but essential to the recovery and growth of its property market. The country’s ability to maintain robust GDP growth, attract high levels of FDI, and steadily increase per capita income ensures a solid demand base across all asset classes.

While challenges remain—such as regulatory hurdles and affordability gaps—the macroeconomic stability and forward-looking development agenda offer a compelling backdrop for long-term real estate investment and development.

3. Legal and Policy Reforms: Shaping the Market Landscape

A Legislative Reset: The Foundation for Market Maturity

Vietnam’s real estate market is undergoing a transformative regulatory overhaul in 2025, catalysed by the enforcement of three landmark legal instruments:

Land Law 2024
Housing Law 2023
Real Estate Business Law 2023

Originally slated for implementation from January 1, 2025, these laws may take effect as early as July 1, 2024, pending government approval. This accelerated timeline reflects Vietnam’s determination to overhaul its legal framework to:

Establish regulatory clarity and consistency
Reinforce investor protections
Harmonise policies across related domains (land, housing, investment)
Reduce systemic risks and enhance market transparency

Real Estate Business Law 2023: Elevating Market Discipline

The Real Estate Business Law 2023 introduces key mechanisms aimed at improving transparency, controlling speculation, and strengthening consumer safeguards.

Capital Raising & Consumer Protection

Deposit Restrictions: Developers are prohibited from collecting over 5% of property value as a deposit prior to meeting legal preconditions.
- Intended to curb speculative sales practices
- Improves access for first-time homebuyers and middle-income households

Developer Financial Accountability

Full settlement of financial obligations (e.g. land use fees, taxes, rent) is now a legal prerequisite for transacting real estate.
Enhances project legitimacy and investor confidence by ensuring only financially compliant developers can launch sales.

Revised Bank Guarantee Requirements

Elimination of the mandatory developer guarantee clause
Buyers and developers now have the freedom to mutually agree on the necessity of such guarantees

Foreign Capital Access Simplified

Entities with ≤50% foreign capital are classified as domestic investors under real estate law
- Aligns with the Investment Law
- Expands foreign access to domestic property projects
- Encourages joint ventures and hybrid capital models

Housing Law 2023: Social Equity and Urban Planning Prioritised

The Housing Law 2023 addresses long-standing ambiguities while laying a foundation for social housing reform, equitable access, and orderly urban growth.

Clarification of Apartment Ownership Tenure

Removes uncertainty regarding apartment ownership term limits
- Ownership is now indefinite
- Property owners retain land use rights even after a building’s lifecycle ends

Social Housing Expansion

Residency restrictions lifted for buyers of social housing
- Broader eligibility for rural migrants and young workers
Establishes mechanisms to mobilise private capital for affordable housing

Development Typologies Redefined

In major cities, apartment buildings are prioritised over detached housing
Developers are now largely limited to building for-sale or for-lease housing—discouraging speculative land hoarding

Land Law 2024: A Paradigm Shift in Property Governance

The new Land Law signifies a decisive break from Vietnam’s centralized, bureaucratic legacy in favour of a market-oriented, investor-aligned approach.

Land Valuation Reforms

Price bracket system abolished (in use since 1993)
Annual market-based pricing tables mandated at the provincial level
- Adjusted to reflect prevailing transaction values
- Improves transparency, reduces land speculation

System	Before 2024	After Land Law 2024
Land Valuation	Centrally controlled price bracket	Decentralised, market-reflective
Price Revision Frequency	5-year intervals	Annually
Price Basis	Administrative determination	Real market data

Fair Compensation & Resettlement Obligations

Developers must guarantee:
- Living standards equal to or better than displaced residents’ prior conditions
- Full completion of compensation and resettlement plans prior to land clearance

Land Acquisition Pathways

Enables direct negotiation between developers and land users for residential-to-commercial conversion
- Transfers acquisition risk from state to developers
- Encourages voluntary, transparent transactions

Payment Structures for Land Rent

Restricts lump-sum rental payments to:
- Agricultural land
- Industrial parks (IPs)
- Commercial tourism zones
- Social housing for lease
Annual rental schemes may now apply to most other land uses, introducing cost variability over time

Legal Empowerment for Foreign Investors

Clarifies foreign-invested enterprise (FIE) rights to:
- Acquire land within industrial parks
- Invest in real estate projects
- Lease or transfer usage rights with clearer protections

Security Interests & Credit Access

Domestic landholders can now:
- Mortgage land use rights and assets on land to licensed financial institutions
- Facilitates credit flow into real estate and construction

Land and Property Databases

Launch of a national digital land and property registry
- Certain information made publicly accessible
- Enhances due diligence, pricing accuracy, and investor transparency

Strategic Impact Assessment: Legal Reform as a Market De-Risking Mechanism

The integration of these legislative changes reflects a proactive and institutionalised response to market volatility. Rather than offering short-term fixes, Vietnam’s legal reform package is a long-horizon strategy to:

Align the property market with international investment standards
Foster cross-border capital inflows
Strengthen legal enforceability and market predictability
Encourage build-to-own and long-term project cycles over speculative trading

Impact Area	Before Reform	Post-Reform Effects
Legal Clarity	Fragmented, overlapping, slow enforcement	Harmonised, enforceable, transparent
FDI Entry Barriers	Uncertainty around eligibility and rights	Expanded foreign access, equal treatment
Consumer Protection	Weak enforcement and opaque pre-sales	Regulated deposits, disclosure mandates
Land Price Rationality	Artificially low valuations	Market-based annual tables
Transparency & Disclosures	Limited access to land data	National public database for real estate due diligence

Conclusion: A New Legal Architecture for a More Investable Vietnam

Vietnam’s 2025 legal overhaul marks the beginning of a rules-based property regime, designed to reduce ambiguity, curb systemic risk, and promote long-term investment. The unified implementation of the Land Law, Housing Law, and Real Estate Business Law will serve as a critical market stabiliser by:

Enhancing regulatory transparency
Encouraging private sector participation in housing and infrastructure
Strengthening legal protections for domestic and foreign stakeholders
Facilitating deeper institutional capital flows

By transitioning to market-based valuation systems, clarifying ownership frameworks, and opening new pathways for foreign and hybrid capital, Vietnam positions itself as a leading destination for real estate investment in Southeast Asia.

4. Residential Property Market: Dynamics and Outlook for 2025

Market Sentiment and Structural Momentum

Vietnam’s residential property sector enters 2025 amid a cautiously optimistic recovery. A decade-low in new supply during 2023 has catalyzed a sharp rebound in 2024 and early 2025, with improved sales velocity, strong absorption rates, and bullish pricing trends — especially in Hanoi. This resurgence is driven by:

A more robust regulatory framework under new real estate laws
Persistent urbanisation and middle-class expansion
Government-backed policies to accelerate social housing development
Investor interest, despite short-term yield compression, reflecting longer-term confidence

Residential Supply Dynamics: Uneven Recovery Across Cities

After a constrained supply cycle in 2023, Vietnam’s housing inventory expanded considerably in 2024. However, the gap between supply and real demand — particularly for affordable housing — remains a key pressure point.

Nationwide & City-Level Trends

2023 Supply Constraints:
- Hanoi: ~13,000 units
- HCMC: ~8,700 units — both marking decade-lows
2024 Nationwide Surge:
- ~81,000 units listed (↑ 40% YoY)
- ~65,300 were new listings (↑ nearly 3x YoY)
Hanoi’s Supply Boom:
- 28,700 new apartments launched (↑ 3.4x vs. 2023)
- Highest supply in 5 years
2025 Outlook:
- Hanoi forecasted to deliver 25,000–30,000 units
- HCMC expected to supply only 7,000–8,000 units
- Supply tightness in HCMC may sustain upward pricing pressure

Q1 2025 Highlights

Hanoi recorded the largest Q1 condominium and landed property supply in four years
HCMC’s inventory levels remained subdued, reflecting planning delays and lingering developer caution

Sales Performance and Absorption Trends

National Market Overview

Over 47,000 successful transactions in 2024
Impressive 72% absorption rate — signaling healthy market liquidity
Condominium projects constituted ~75% of sales

Hanoi: A Market in Acceleration

Q1 2025 Sales:
- 7,914 apartments sold (↑ 49% YoY, ↓ 41% QoQ)
- Grade B segment: 99% of total sales
- New inventory absorption: 84%
Landed Property Segment:
- 1,629 units sold (↑ YoY, ↓ 49% QoQ)
- Absorption rate: 41%
2024 Total Sales in Hanoi:
- 29,800 units (↑ 1.8x YoY)
- Large-scale integrated urban projects saw absorption rates near 90%

HCMC: A Slower, More Selective Uptick

Q1 2025 Sales:
- Just over 1,400 apartments sold (↓ 46% QoQ)
- Performance better than Q1 2023 & Q1 2024
Absorption Rates:
- Overall: 23%
- Newly launched units: 61%
Villas & Townhouses:
- Only 69 units sold, 10% absorption
- Illustrates continued weakness in luxury suburban segments

Pricing Trends and Growth Trajectory

Residential prices in Vietnam, especially in Hanoi, are witnessing accelerated appreciation. This is driven by scarcity of well-located projects, upgraded amenities, and anticipatory investor behaviour ahead of further legal reforms.

Hanoi: A Price Leader in 2025

Metric	Q1 2025
Avg. Primary Apartment Price	VND 79M/sqm (~$3,300) ↑ 32% YoY, ↑ 5% QoQ
Avg. Annual Growth (Last 5 Years)	22%
Top District – Tay Ho	VND 185M/sqm (~$7,750) ↑ 40% CAGR
Highest Growth Area – Dong Anh	↑ 42% CAGR (boosted by Vinhomes Global Gate)
Avg. Landed Property Price (Hanoi)	~$11,934/sqm ↑ 101% YoY

HCMC: Moderated Price Recovery

Avg. primary apartment price: $3,316/sqm
- ↑ 1.5% YoY, ↑ 1.6% QoQ
Price growth remains slower due to:
- Oversupply of premium units in prior years
- Cautious investor sentiment post-regulatory tightening

Land Price Trends

Peripheral areas and industrial zones near Hanoi saw 10–20% price hikes in 2024
Land prices stabilised overall in Q1 2025, with selective upward movement based on infrastructure proximity

Rental Yield Performance: Compression Amid Price Surge

Region	Q1 2025 Avg. Gross Rental Yield (%)	Q1 2024 (%)	Trend
Hanoi	3.18	3.91	↓ Yield Compression
Nationwide Avg	3.26	3.91	↓ Due to price growth

Yield compression signals that capital appreciation is outpacing rental income growth
Investors may be prioritising capital gains over stable rental cash flows
Rising prices and stagnant rents suggest that rental market adjustments may lag behind asset values

Hanoi vs. HCMC Residential Performance Matrix – Q1 2025

Indicator	Hanoi	Ho Chi Minh City
Primary Apartment Supply	Largest Q1 supply in 4 years	~4,922 units (↓ 35% QoQ, ↓ 28% YoY)
Apartment Sales	7,914 (↑ 49% YoY, ↓ 41% QoQ)	~1,400+ (↓ 46% QoQ, improved YoY)
Absorption Rate (Apartments)	84% (Grade B: 99%)	23% (Overall), 61% (New launches)
Avg. Primary Apartment Price	VND 79M/sqm (~$3,300)	$3,316/sqm (↑ 1.5% YoY, ↑ 1.6% QoQ)
Avg. Secondary Apartment Price	VND 60M/sqm (↓ 1% QoQ, ↑ 41% YoY)	Not explicitly available (flat in 2023)
Villa/Townhouse Sales	1,629 (↑ YoY, ↓ 49% QoQ)	69 units (flat QoQ, ↓ 5% YoY)
Absorption Rate (Villas/Townhouses)	41% (↓ 26 pts QoQ, ↑ 13 pts YoY)	10% overall, 28% for new supply
Avg. Gross Rental Yield	3.18%	Not disclosed; national avg: 3.26%

Strategic Outlook: Investment Implications and Policy Response

Identified Imbalances

Persistent supply shortages in affordable and mid-tier housing
Rising prices without proportionate rental growth = yield compression
Polarised market: Hanoi outperforms, HCMC stabilising

Investor Considerations

Focus on Grade B apartments in Hanoi and transport-linked suburban zones
Exercise caution in luxury and speculative segments with low absorption
Assess rental potential vs capital appreciation in emerging areas

Policy Interventions

Government accelerating initiatives to:
- Promote social and worker housing projects
- Simplify land clearance and legal approvals
- Expand infrastructure to unlock suburban supply pipelines

Conclusion: A Market of Two Speeds, Built on Asymmetry

Vietnam’s residential real estate market in 2025 is characterised by dual narratives. Hanoi leads the rebound with strong sales, rising prices, and robust absorption — especially in mid-tier integrated developments. In contrast, HCMC reflects a more cautious recalibration, with supply pipeline constraints and lower sales performance.

Amid tightening rental yields and segmented market strength, investors must align strategies with true end-user demand, not speculative price momentum. The regulatory clarity introduced by Vietnam’s legal reforms, alongside continued economic resilience, positions the residential sector for sustained long-term growth, albeit with short-term friction caused by persistent supply-demand mismatches.

5. Commercial Property Market: Office and Retail Sector Insights

Market Size and Forward Outlook

Vietnam’s commercial real estate (CRE) sector is entering a new cycle of strategic transformation and growth in 2025. Buoyed by macroeconomic resilience, expanding domestic consumption, infrastructure upgrades, and robust foreign investment flows, the market is expected to exhibit strong momentum across both the office and retail segments.

Market Valuation and Forecast

Metric	2024 Estimate	2025 Projection	2030–2034 Forecast
Market Size (USD, source: industry avg.)	~USD 16.61 billion	~USD 45.33 billion	~USD 60.51 billion by 2034
CAGR (2025–2034, high-end scenario)	–	–	13.8% (based on upper-bound estimates)
CAGR (Mordor Intelligence)	–	8.04%	USD 48.97 billion by 2030

Divergence in projections highlights the uncertainty around inflation, leasing demand, urban migration trends, and capital flows
Office assets account for the largest share (~34%) of the CRE market, followed by retail, logistics, and hospitality real estate

Vietnam’s Office Property Segment: Stabilisation Amid Structural Evolution

Supply, Vacancy, and Leasing Demand

Supply Surge in 2023–2024:
- New completions in both Hanoi and HCMC led to increased vacancy rates, especially in Grade B buildings
- Hanoi is projected to add 24,500 sqm of new supply in 2025 alone
Occupancy & Vacancy Rates:
- Hanoi:
  - Q1 2024: ~87% occupancy
  - Q4 2024: Strong leasing activity from IT, banking, and logistics sectors
  - Forecast: Vacancy rates to decline to 23–24% by 2025–2026, then rise to 27–28% by 2027 due to upcoming supply
- HCMC:
  - Q1 2024: ~90% occupancy (↓ YoY)
  - Consistent double-digit vacancy throughout 2024 across Grades A & B

Rental Trends and Net Absorption

City	Grade	Q1 2024 Rent (VND/m²/month)	YoY Change (%)	Forecasted Growth (2025–2026)
Hanoi	A	Stable	Slight ↓	+1.7% to 2.2% expected
Hanoi	B	Declined due to supply influx	-2% QoQ, -1% YoY	Gradual recovery likely
HCMC	A & B	VND 799,000	+3.7% in CBD	Expected to remain stable

Net absorption projected to decline:
- 2024: ~88,000 sqm
- 2025: ~50,000 sqm as corporations consolidate space amid hybrid work adoption

Key Demand Drivers

Active leasing sectors:
- Banking and finance
- IT and software
- Insurance and logistics
Growing interest in:
- Flexible workspaces
- Green-certified and tech-enabled office buildings
- Metro-connected towers with multinational tenants

Retail Property Segment: Consumer Demand Drives Resilience

Retail Supply Pipeline and Expansion Projects

2023–2024 Developments:
- Hanoi: +14,734 sqm in 2024 from new openings such as Lotte Mall West Lake
- HCMC Q1 2025: +1% QoQ, +6% YoY driven by Centre Mall Vo Van Kiet
Future pipeline:
- 52% of new supply in HCMC to be concentrated in central districts
- AEON Xuan Thuy and other large malls expected to reshape retail dynamics

Occupancy and Rent Growth

City	Occupancy Rate (Q1 2025)	YoY Change	Average Rent (Ground Floor)	YoY Rent Growth
Hanoi	~90.6% (↓ slightly from Q4)	–	↑ 2% QoQ, ↑ 13% YoY	Strong upward trend
HCMC	94% (↑ from 92%)	+2% YoY	VND 1.4 million/m²/month	↑ 9% YoY

High-end malls achieving near-full occupancy, driven by:
- Luxury and fashion retail expansion
- Strong F&B, entertainment, electronics, and home goods leasing demand

Key Trends and Structural Shifts

Luxury Brand Penetration:
- Continued growth in Hanoi and HCMC driven by rising disposable incomes and foreign retailer entry (e.g. Chinese brands)
Mall vs. Street Retail:
- Shopping malls increasingly favoured over traditional high-street stores due to:
  - Better customer experience
  - Integrated leisure and entertainment
Total retail sales (HCMC): ↑ 14% YoY in Q1 2025

Investment Signals and Strategic Positioning

Office Market Outlook

Indicator	Direction	Remarks
Net absorption (2025)	↓ (~50,000 sqm)	Post-COVID space rationalisation continues
Vacancy (2025–2026)	↓ in short term	Expected rise from 2027 due to supply influx
Grade A leasing demand	Stable, sector-driven	IT, Banking, Logistics dominate
Rental growth (Hanoi)	Mild increase (2%)	Newer projects in metro-linked locations perform well

Retail Market Outlook

Indicator	Direction	Remarks
Rental Growth	↑ 8–13% YoY	Especially strong in HCMC and Hanoi’s CBDs
Occupancy Rate	↑	Well-located malls achieving >90%
Demand for modern retail formats	↑	Decline of traditional street-front retail
Sector Momentum	Robust	Buoyed by F&B, fashion, electronics

Future-Facing Themes: Sustainability and Digitisation

Green Building Certification is increasingly a prerequisite for corporate tenants and international investors
Smart building integration (IoT, contactless tech, energy management) is enhancing asset performance
Institutional capital is flowing into income-generating, ESG-compliant assets — especially:
- Completed office towers with high occupancy
- Retail hubs near metro lines
- Mixed-use developments that blend commercial and residential offerings

Strategic Takeaways for Investors and Developers

Prioritise retail and logistics: These segments offer stronger yield stability and faster absorption than office in 2025–2026
Focus on location and accessibility: Metro-adjacent properties with high footfall outperform
Avoid speculative office developments: Occupier market is becoming more selective, with pressure on non-grade-A assets
Target ESG-aligned buildings: Green-certified assets command premium rents and attract institutional capital
Consider tenant diversification: Assets leased to multi-sector tenants (e.g., F&B, co-working, tech firms) mitigate vacancy risk

Conclusion: Divergent Growth Paths in Commercial Real Estate

Vietnam’s commercial property market in 2025 is evolving along two contrasting trajectories. While the office segment reflects a period of rationalisation and reconfiguration—prompted by new supply and changing workplace strategies—the retail sector continues to thrive, driven by strong consumer sentiment and the expansion of modern, experience-led shopping environments.

The shift toward sustainable, technologically advanced, and amenity-rich properties is shaping investor preferences and tenant requirements alike. For forward-thinking stakeholders, the key lies in strategically deploying capital into resilient asset classes that align with urban infrastructure, consumer trends, and regulatory clarity.

6. Industrial Real Estate: A Pillar of FDI-Driven Growth

Overview and Market Forecast

Vietnam’s industrial real estate sector stands as a linchpin in the nation’s economic evolution, underpinned by a confluence of favourable macroeconomic fundamentals, strategic geopolitical positioning, and a robust inflow of foreign capital. As global supply chains recalibrate and industries diversify away from traditional manufacturing powerhouses, Vietnam continues to emerge as a competitive and resilient industrial hub in Southeast Asia.

Market Size and Growth Trajectory

Metric	2025 Projection	2033 Forecast	CAGR (2025–2033)
Total Market Value	USD 19.07 billion	USD 58.7+ billion (est.)	15.42%
FDI in Real Estate (Q1 2025)	USD 2.4 billion	–	+46% YoY vs Q1 2024
% Share of Total FDI (2024)	16.5%	–	18.8% YoY growth

Core Drivers of Growth and Structural Expansion

Foreign Direct Investment (FDI) Momentum

Vietnam’s strategic integration into global supply chains, particularly amid the China+1 strategy, is triggering significant foreign investment across the industrial spectrum
Key trends:
- Increased capital deployment in secondary provinces (e.g., Ba Ria–Vung Tau, Tay Ninh, Binh Phuoc)
- FDI not only brings funding but also accelerates technology transfer, high-value employment, and supply chain localization
- FDI in industrial assets rose by 46% YoY in Q1 2025, showcasing continued investor confidence in the manufacturing backbone of Vietnam

Manufacturing Sector Expansion

Heightened demand from:
- Electronics, semiconductors, and electric vehicles (EVs)
- Textiles, furniture, food processing, and light manufacturing
Rapid growth of ready-built factories (RBFs) and build-to-suit (BTS) facilities
Vietnam’s appeal is amplified by its low labor cost-to-output ratio, free trade agreements, and political stability

Infrastructure and Connectivity Upgrades

Accelerated development of strategic infrastructure networks:
- Highways (e.g., North-South Expressway expansions)
- Deep-sea ports (notably Hai Phong and Cai Mep–Thi Vai)
- Rail and logistics corridors linking industrial parks to urban and export nodes
Connectivity is becoming a key differentiator in site selection for multinational manufacturers

Policy Support and Land Use Planning

Government-approved provincial master plans (2021–2030) aimed at:
- Easing land acquisition bottlenecks
- Simplifying administrative and legal processes for industrial park development
- Promoting zoning for eco-industrial parks and logistics clusters

Market Performance Snapshot (2024) and Regional Dynamics

National Occupancy and New Supply

Over 400 active and planned industrial parks (IPs) maintained average occupancy rates >80%
Southern Vietnam registered an 80% occupancy rate, though marginally down due to new supply
Occupancy softened slightly due to rising stock, though absorption remained relatively strong across key sectors

Regional Performance Comparison

Metric	Northern Region	Southern Region
Net Absorption (2024)	400+ hectares (↑, driven by EV, tech)	265 hectares (↓ 52% YoY)
Rental Price (USD/sqm)	$137 (end-2024, ↑ 4.2% YoY)	$175 (end-2024, ↑ 1.4% YoY)
RBF/Warehouse Rent (USD/sqm/m)	$4.9 (Q4 2024 average)	$4.9 (Q4 2024 average)
Key Sectors	Electronics, EV, precision manufacturing	Traditional manufacturing
Notable Absorption	83 hectares in Q4 2024 alone (N. Key ER)	Limited net absorption in 2024

Rental price convergence: Narrowing gap between northern and southern parks, signalling increased investor demand in the north
Rising preference for North:
- Proximity to China
- Strategic access via Hai Phong Port
- Growing ecosystem around high-tech, clean, and green industries

Emerging Sector Trends and Investor Priorities

Technology Integration and Smart Infrastructure

Adoption of IoT-enabled logistics systems, automation, and warehouse management technologies
Shift from basic industrial parks to smart industrial zones with:
- Centralised utilities
- Energy-efficient buildings
- Digitalized tenant services

Sustainability and ESG Compliance

Growing demand for:
- LEED-certified industrial spaces
- Solar-powered facilities
- Eco-industrial parks incorporating circular economy models
ESG-conscious tenants and investors are driving green retrofits and energy transition initiatives

Flexible Industrial Space Demand

Surge in modular, scalable industrial units to support:
- SMEs and mid-sized exporters
- E-commerce logistics fulfilment
Developers increasingly offer shorter lease terms, shared logistics hubs, and value-added services

Risks, Constraints, and Market Challenges

Land scarcity in prime logistics corridors around Hanoi, HCMC, and Da Nang
Escalating construction costs driven by supply chain disruptions and raw material inflation
Labor shortages in skilled trades despite overall labor abundance
Lagging administrative reform in some provinces delays industrial park approvals

Strategic Investment Outlook and Recommendations

Geographical Reorientation: North Over South?

The Northern Region—particularly Hai Phong, Bac Ninh, and Quang Ninh—is experiencing a disproportionate share of net absorption and new FDI inflows
Investors recalibrating strategies toward the North due to:
- Competitive land pricing
- Integrated transport logistics
- Tech-ready talent pool
- Closer proximity to Chinese supply chains

Developer Priorities

Prioritise Build-to-Suit solutions tailored for electronics, semiconductors, and EV clients
Integrate green infrastructure and smart park management systems
Focus on secondary markets undergoing infrastructure expansion (e.g., Thai Nguyen, Vinh Phuc, Long An, Dong Nai)
Ensure legal and procedural compliance by aligning projects with provincial master plans

Table: Industrial Real Estate – 2024 vs. 2025 Outlook

Indicator	2024 (Actual)	2025 Outlook
Market Value	USD 16.4–19.1 billion (est.)	Expected to surpass USD 21 billion
Avg. National Occupancy Rate	~80% (slight dip from new supply)	Expected to stabilise at ~81–83%
North Net Absorption	400+ ha (↑ electronics, EVs)	Sustained growth; ≥500 ha possible
South Net Absorption	265 ha (↓ 52% YoY)	Recovery expected but lagging behind North
Avg. Rental (North vs. South)	$137 vs $175/sqm (end 2024)	Price gap to narrow further
RBF/Warehouse Rent	$4.9/sqm/month nationwide	Likely to rise slightly due to construction cost

Conclusion: Industrial Real Estate as a Strategic Growth Lever

Vietnam’s industrial property market in 2025 reflects a strategic pivot toward high-value, sustainable, and globally integrated manufacturing ecosystems. The Northern provinces, benefitting from proximity to key supply chain corridors and supportive infrastructure, are fast becoming the new frontier for industrial development. Meanwhile, the rise of ESG standards, tech-enabled logistics, and flexible industrial formats is reshaping developer and investor priorities.

As Vietnam continues to position itself as a regional manufacturing hub, industrial real estate is no longer just a passive asset class—it is a critical enabler of the country’s broader economic ambitions. Stakeholders who align their portfolios with these structural trends stand to capture sustained value creation across the next decade.

7. Hospitality and Tourism Real Estate: Rebound and Emerging Opportunities

Sector Overview and Market Outlook

Vietnam’s hospitality and tourism real estate sector is undergoing a transformative revival, positioning itself as one of the fastest-growing verticals in the country’s property market. Fuelled by a powerful resurgence in international arrivals and increasing domestic tourism, the sector is moving beyond post-pandemic recovery into an era of sustainable expansion and strategic diversification.

Hospitality Market Growth Trajectory

Indicator	Value (2024)	Forecast (2033)	CAGR (2025–2033)
Market Size (USD)	$7.0 billion	$20.7 billion	12.20%
Projected Market Size (2025)	$7.85 billion (est.)	–	–
Average Absorption Rate (2024)	57% (↑ 2x from 2023)	–	–
International Arrivals (2024)	17.5 million (↑ 39.5%)	–	–
International Arrivals (Q1 2025)	6 million+ (↑ 134% vs. Q1 2019)	Highest quarterly figure on record	–

Key Growth Drivers

International Tourism Recovery

Vietnam is now Southeast Asia’s fastest-recovering tourism destination.
Q1 2025 marked a record-breaking quarter, with international arrivals exceeding pre-pandemic levels by 134%.
The surge is supported by:
- Renewed global travel appetite
- High vaccination rates and relaxed restrictions
- Enhanced airline connectivity with Europe, Northeast Asia, and Australia

Improved Tourism Infrastructure

Major investments in:
- Airport modernisation (e.g., Long Thanh International Airport)
- Expressways connecting key tourism nodes
- Urban transit upgrades in HCMC, Hanoi, and Da Nang
These infrastructure projects improve regional access and reduce travel friction for both domestic and foreign visitors

Liberalised Visa Policies

Policies introduced include:
- E-visa eligibility for 157 countries
- Extended 90-day multiple-entry visas
Result: streamlined entry process enhances Vietnam’s competitiveness as a long-stay destination

Rise of International Hotel Brands

Global operators expanding across segments:
- Eco-luxury resorts (Six Senses, Banyan Tree)
- Midscale brands (Holiday Inn, Ibis Styles)
- Serviced residences for long-stay business travellers
These developments improve investor confidence and brand visibility

Government Support and Destination Promotion

Aggressive tourism promotion campaigns under “Vietnam Timeless Charm”
Public-private partnerships in developing sustainable and smart tourism destinations
Provincial incentives for resort developers and hotel operators

Sector Performance (2024–Q1 2025)

Hotel and Serviced Apartment Metrics

Location	Occupancy Rate	ARR Growth	RevPAR Trend
Hanoi (Q1 2024)	65% (↑ from 60% in Q4 2023)	+2% QoQ, +11% YoY	Moderate increase YoY
HCMC (Q1 2024)	66%	+9% YoY	Strong RevPAR growth in Q1 2025
HCMC (Q1 2025)	“High” (exact not disclosed)	–	Strongest performance in recent years
National (2025 est.)	72% (↑ 8 ppts vs. 2019)	–	RevPAR +15% YoY globally
Green Certified Properties	–	Higher ADR than market average	Increased brand equity

Serviced Apartments:
- Demand driven by rising FDI inflows and growing expatriate population
- Long-stay formats gaining popularity, especially in urban centres

Emerging Trends and Strategic Opportunities

Coastal Tourism Real Estate

Dominates the hospitality recovery:
- 4-star and 5-star hotels in coastal cities outperforming other segments
Leading markets:
- Da Nang
- Nha Trang – Khanh Hoa
- Phu Quoc – Kien Giang
- Ha Long – Quang Ninh
Pipeline projections indicate continued hotel and resort launches over the next 3 years
- Danang and Ba Ria–Vung Tau expected to lead in new developments

Emerging Destination Investments

New tourism growth zones with high land availability:
- Ninh Binh, Gia Lai, Dak Lak, Quang Ngai
High potential for:
- Nature-focused tourism
- Cultural heritage offerings
- Eco-resorts and boutique stays

Green and Eco-Friendly Hospitality

Vietnam saw 163 green-certified buildings in 2024, doubling from 2023
LEED-certified hotels command higher ADRs and stronger investor interest
Eco-conscious travellers driving demand for:
- Energy-efficient resort designs
- Zero-waste operations
- Sustainable sourcing in F&B

Digital Transformation in Guest Experience

Adoption of contactless and tech-enabled guest services:
- Mobile check-in/out
- Smart room controls
- Integrated concierge apps
Example: Hoiana Resort’s March 2025 partnership with Shiji Group for end-to-end digital guest experience rollout

Growth in Midscale and Budget Segments

Domestic travel continues to surge, especially among Gen Z and budget travellers
High growth recorded in:
- Urban 2–3 star hotels
- Roadside motels in tier-2 cities
- Branded hostels and capsule hotels

The Rise of Workcations and Extended Stays

58% of business travellers now combine leisure with business trips
Hotels respond by:
- Offering dedicated co-working lounges
- High-speed internet and business suites
- Special pricing for long-stay packages

Investor Implications and Strategic Outlook

What This Means for Investors

Diversification beyond luxury is now essential:
- Focus on midscale, experiential, and green hotel developments
Coastal regions remain strongholds, but emerging inland destinations offer first-mover advantage and large land banks
The convergence of digital innovation, visa liberalisation, and tourism infrastructure creates a fertile environment for sustained long-term returns

Recommended Investment Priorities

Prioritise:
- Eco-resorts and green hotels in high-potential natural destinations
- Tech-enabled urban hotels targeting digital nomads and long-stay guests
- Mixed-use developments integrating retail, hospitality, and co-working formats

Table: Vietnam Hospitality Market Key Indicators (2024–Q1 2025)

Indicator	Value
International Visitor Arrivals (2024)	17.5 million (↑ 39.5% YoY)
International Arrivals (Q1 2025)	6+ million (↑ 134% vs. Q1 2019)
Market Value (Hospitality, 2024)	USD 7.0 billion
Estimated Value (Hospitality, 2025)	USD 7.85 billion
Average Absorption Rate (2024)	57% (↑ 2x YoY)
Hanoi Hotel Occupancy (Q1 2024)	65%
Hanoi ARR (Q1 2024)	↑ 2% QoQ, ↑ 11% YoY
HCMC Hotel Occupancy (Q1 2024)	66%
HCMC ARR (Q1 2024)	↑ 9% YoY
Certified Green Buildings (2024)	163 (↑ 100% YoY)
Workcation Business Travel Ratio	58%

Conclusion: Vietnam’s Tourism Real Estate – From Rebound to Resilience

Vietnam’s hospitality and tourism real estate sector in 2025 showcases a pivotal evolution from a crisis-led rebound to a sophisticated, diversified, and sustainability-aligned growth phase. The combination of record-breaking international arrivals, policy reform, and infrastructure investment offers a robust foundation for long-term investor confidence.

As the country repositions itself from mass-market tourism to experience-based, green, and digitally enhanced hospitality, stakeholders who prioritise adaptability, innovation, and sustainability will be best positioned to capture this new era of demand.

8. Key Growth Drivers: Catalysts for Vietnam’s Property Market

Vietnam’s property sector is underpinned by a combination of demographic momentum, robust infrastructure investment, FDI inflows, rapid urbanization, and emerging innovations in green construction and PropTech. Together, these factors are redefining Vietnam’s real estate landscape, creating both opportunities and strategic imperatives for developers, investors, and policymakers.

Economic Strength and Demographic Momentum

Macro-Economic Foundations

2024 GDP Growth: 7.09% – among the highest in Asia.
2025 GDP Forecast: 5.2% – signalling continued resilience amid global volatility.
Key economic drivers include:
- High export volumes
- Robust manufacturing
- Strong FDI inflows
This macroeconomic stability underpins consistent real estate demand across residential, commercial, and industrial segments.

Demographic Dividend

Indicator	Value
Total Population (2023)	100 million
Working-Age Population (15–64 years)	67.3% (~67 million)
Middle Class Growth Rate	10% annually
Projected Middle-Class Share (2030)	>60% of total population
Households earning > $5,000/year (2027)	60%

This rapidly expanding consumer base drives:
- Higher consumption of quality housing
- Increased spending on healthcare, retail, and services
- Demand for modern urban infrastructure

Implication

Developers should prioritise affordable yet quality-driven mid-range projects, integrated townships, and mixed-use urban zones aligned with the preferences of the aspirational middle class.

Infrastructure Investment as a Strategic Real Estate Multiplier

Government’s Infrastructure Spending Plan

H2 2025 Public Investment Target: $25.2 billion
Focus on nationwide transport upgrades, including expressways, metro systems, airports, ports, and intercity rail.

Transport Infrastructure Projects

Type	Projects & Milestones
Expressways	3,000 km by 2025; additional 2,000 km by 2030
Metro Lines	Hanoi: 10 lines (417.8 km); HCMC: 10 lines (510 km), $77.2B total investment
Airports	Long Thanh International Airport, Cat Bi Expansion, upgrades in Da Nang & Phu Quoc
Ring Roads	Ring Road 3 (HCMC), Ring Road 4 (Hanoi), facilitating interprovincial urban expansion
Rail Projects	North–South High-Speed Railway feasibility study begins 2025; 3 Vietnam-China links planned

Real Estate Impacts

20% property price surge near HCMC Metro Line 1 (Q1 2025)
Peripheral areas like Binh Duong, Cu Chi (South), and Dong Anh, Me Linh (North) are experiencing increased investor interest and land value appreciation.

Implication

Strategic land banking and project planning in secondary cities and suburban nodes are critical to capture the re-rating effect of infrastructure investment.

Foreign Direct Investment (FDI): The Anchor of Sustained Property Demand

FDI Overview (2024)

Category	Amount (USD)	Growth / Share
Total FDI (incl. new capital + M&A)	$38.23 billion	+9.4% YoY
Disbursed FDI	$25.35 billion	Record high
Real Estate Sector FDI	$6.31 billion	16.5% of total, +18.8% YoY
Cumulative FDI in Real Estate	$73.18 billion	14.6% of total FDI
Top FDI Source Countries	Singapore ($10.21B), China (projects), South Korea (M&A)

Real Estate Multiplier Effects

Industrial parks, logistics, and smart factories require:
- Modern warehousing
- Worker housing
- Executive and expatriate accommodations
High-tech manufacturing (e.g., semiconductors, EVs) increases demand for:
- High-quality infrastructure
- Premium residential and commercial spaces

Implication

Developers should align project pipelines with FDI corridors, particularly in provinces such as Bac Ninh, Hai Phong, Binh Duong, Dong Nai, and Long An. Integrated industrial-residential townships and live-work-play models are in demand.

Urbanisation and Evolving Lifestyles

Urban Expansion Data

Year	Urban Population (%)
1990	20.5%
2017	34.7%
2024	~40%
Urban Growth Rate	2.5%–3.0% annually

Key urbanisation hotspots:
- Greater Ho Chi Minh City (e.g., Thu Duc, Binh Chanh)
- Hanoi (e.g., Gia Lam, Dong Anh)
- Satellite cities (e.g., Bac Ninh, Bien Hoa)

Shifting Consumer Preferences

Rising interest in:
- Apartment living over traditional row houses
- Lifestyle-oriented housing: proximity to malls, schools, green spaces
- Non-essential spending: home appliances, leisure travel, fitness

Implication

Developers must cater to diverse buyer personas:
- Affordable housing for new entrants to urban life
- Mid-tier condos for dual-income families
- Premium integrated projects for upwardly mobile professionals

Technology and Sustainability: The Future-Proofing of Vietnamese Real Estate

Green Building Certification Trends

Year	Certified Green Buildings	Total Floor Area (m²)
2023	396	–
2024	559 (+163 YoY)	13.6 million
2025 Target	Surpassed in 2024	–

Sectoral Trends:
- Industrial green warehouses growing rapidly
- Green offices and retail hit record highs
- Residential green certification rebounding
- Water efficiency improved:
  - 17% reduction in office projects
  - 3% in residential projects

PropTech Integration

Technologies being adopted:
- AI, Blockchain, Big Data for transactions and analysis
- Virtual tours & 3D walkthroughs
- IoT-enabled smart homes and buildings
Adoption drivers:
- Government support for digitalisation
- Consumer comfort with online property search
- Rising demand for seamless experiences

Implication

Developers must build digitally enabled and environmentally certified properties.
- Smart buildings command premium rents
- Green buildings enjoy lower operating costs, higher long-term asset values
- Tenants increasingly demand ESG-compliant and tech-forward real estate

Vietnam Real Estate Drivers Matrix (2025)

Growth Driver	Short-Term Impact	Long-Term Potential	Investment Focus Areas
Economic Growth	High	High	All real estate segments
Demographic Momentum	Medium	High	Residential, Retail, Financial Services
Infrastructure Investment	High	Very High	Suburban housing, Industrial, Transit-Oriented Dev.
Foreign Direct Investment (FDI)	High	High	Industrial Parks, Executive Housing, Mixed-Use
Urbanisation & Lifestyles	Medium	High	Affordable & Mid-Range Apartments, Townships
PropTech Adoption	Medium	Very High	Digital Platforms, Smart Homes, CRM Systems
Green Buildings	Low to Medium	Very High	Eco-Offices, Sustainable Industrial Parks, LEED Units

Strategic Recommendations for Developers and Investors

Align with Infrastructure Maps:
- Prioritise land acquisition near metro lines, ring roads, and highways.
Target FDI-Heavy Corridors:
- Position integrated developments near industrial parks.
Cater to the Middle-Class Majority:
- Develop quality mid-tier housing with lifestyle amenities.
Adopt Green and Smart Building Models:
- Secure LEED/BREEAM certifications and embed tech infrastructure.
Embrace Digital Transformation:
- Implement PropTech platforms across sales, leasing, and property management.

9. Challenges and Risks: Navigating the Headwinds

Despite strong macroeconomic fundamentals and optimistic long-term projections, Vietnam’s real estate market in 2025 continues to grapple with entrenched structural constraints and emergent vulnerabilities. These challenges, if unaddressed, pose tangible risks to sustained growth and investor confidence.

Legal Bottlenecks and Project Gridlocks

Delayed and Frozen Projects:
- As of mid-2025, approximately 1,000 real estate projects across Vietnam remain suspended or significantly delayed.
- These stalled developments represent an estimated USD 30 billion in immobilized capital.
- In 2023 alone, 1,200 projects valued at USD 3.4 billion were reported on hold, leading to financial strain across the construction ecosystem.
Business Impact:
- Over 1,800 construction companies were adversely affected by project delays.
- 340 real estate firms filed for bankruptcy in Q1 2023, predominantly due to legal ambiguities and project licensing hurdles.
Geographic Concentration:
- Hanoi and Ho Chi Minh City bore the brunt, with roughly 400 and 300 suspended projects, respectively.
Regulatory Reforms Underway:
- The rollout of the Land Law 2024, Housing Law 2023, and Real Estate Business Law 2023 is expected to provide a clearer legal pathway.
- However, local-level bureaucratic inertia and interpretation inconsistencies remain significant impediments to swift resolution.

Supply-Demand Distortion and Affordability Crisis

Acute Housing Shortages:
- The severe undersupply, particularly in the affordable housing segment, is a primary source of upward pricing pressure.
- Entry-level homes priced below VND 50 million/m² (~USD 2,000/m²) have become increasingly scarce, especially in Hanoi and HCMC.
Affordability Gap:
- Median home prices in Vietnam are now multiple times higher than the average annual income.
- For many Vietnamese, homeownership is financially out of reach, with mortgages potentially spanning several generations.
Socio-Economic Consequences:
- This affordability imbalance is fostering social tension, limiting urban migration, and pushing residents to the informal housing sector or satellite cities.

Over-Reliance on the Financial System and Rising Bad Debt Risk

Credit Concentration:
- The real estate sector’s heavy dependence on the banking system makes it susceptible to liquidity shocks and credit tightening.
- In HCMC alone, total real estate loans reached VND 1,085 trillion (~USD 43.4 billion), comprising 27.5% of total outstanding credit.
Growing Non-Performing Loans (NPLs):
- Banks are grappling with a rising backlog of unsold inventory and deteriorating loan quality tied to property-related assets.
Bond Market Volatility:
- Vietnam’s corporate bond market, still in its developmental stage, suffers from low transparency and misallocation of capital.
- Past scandals and defaults have triggered a crisis of investor confidence and reduced bond issuance volume.
Delayed Credit Disbursement:
- Project financing often experiences 5–6 month delays due to stringent compliance and approval backlogs, further slowing market liquidity.

Rising Construction Costs and Land Availability Constraints

Inflated Input Prices:
- Construction materials, including sand, stone, and fill-soil, surged by 30% in late 2024, driven by supply chain bottlenecks and regulatory changes.
Regulatory Cost Burden:
- The newly implemented Circular 08/2025/TT-BXD introduced 58 revised technical standards, raising development costs and lengthening approval timelines.
Urban Land Scarcity:
- Prime land parcels in major urban centers like Hanoi and HCMC are increasingly scarce.
- Developers are being pushed toward peri-urban or Tier-2 cities, which often lack sufficient infrastructure or utility access.

Systemic Risk Analysis: A Medical Metaphor

Professor Tran Ngoc Tho of UEH University aptly compared Vietnam’s real estate system to a chronically ill patient:

Systemic Risk Metaphor	Description
High Blood Pressure	Surging property prices far exceeding income levels
High Blood Sugar	Over-dependence on banking credit to fuel growth
High Cholesterol	Excess supply of unsold units and rising bad debt exposure

This metaphor highlights the interconnectedness of Vietnam’s real estate issues—legal bottlenecks, affordability gaps, financial fragility, and input cost inflation—each reinforcing the other in a loop of systemic vulnerability.

Strategic Implications and Recommendations

For Policymakers:
- Accelerate the de-bottlenecking of legal frameworks at provincial and city levels.
- Promote transparency, consistency, and digitalization in licensing and permitting processes.
- Strengthen supervision of the corporate bond market and encourage diversified financing mechanisms.
For Developers:
- Prioritize market-driven projects aligned with genuine end-user demand, especially affordable and mid-range housing.
- Diversify capital sources through joint ventures, REITs, and green financing mechanisms.
- Invest in land banking in emerging growth corridors with infrastructure connectivity.
For Investors:
- Exercise rigorous due diligence regarding project legal status, developer credibility, and financial solvency.
- Focus on income-generating assets in resilient sub-segments such as logistics, mid-range residential, and green-certified office spaces.

Conclusion

While Vietnam’s real estate market in 2025 is underpinned by strong fundamentals and progressive reforms, a range of persistent structural issues and systemic risks continue to pose tangible threats to stable growth. These risks—legal entanglements, affordability crises, financial overreliance, and cost inflation—require coordinated, multi-stakeholder interventions to mitigate. The road to a healthier, more inclusive property market lies in tackling these vulnerabilities head-on through policy clarity, capital diversification, and targeted urban development strategies.

10. Recommendations for 2025 and Beyond

As Vietnam enters a new phase of post-restructuring economic realignment, the year 2025 is projected to be a pivotal inflection point for the real estate industry. The combination of improved regulatory clarity, recovering liquidity, and accelerating infrastructure expansion is expected to drive renewed growth momentum—particularly in urban centers and their expanding peripheries.

Market Forecast and Sectoral Outlook: 2025 Trajectory

Macroeconomic and Market-Wide Trends

Stabilisation Phase Initiated: 2025 marks the onset of a more stable and disciplined growth cycle for the Vietnamese property sector, supported by synchronized policy reforms and macroeconomic resilience.
Renewed Liquidity Flow: Capital is expected to return to the real estate market gradually, especially in Tier-1 and Tier-2 cities, as investor sentiment improves and legal risks diminish.

Residential Real Estate

Supply-Demand Mismatch Persists:
- Delayed projects from previous years will result in a continued shortfall of new housing units, pushing prices upward.
- Forecasted Apartment Supply:
  - Hanoi: 25,000–30,000 new units (the leading city by volume).
  - Ho Chi Minh City: Estimated 7,000–8,000 new units.
End-User Driven Demand:
- Demand is increasingly dominated by genuine buyers rather than speculative investors, with a growing focus on mid-priced housing.

Commercial and Retail Real Estate

Office Market:
- Slight increases in both supply and rental rates are anticipated, although vacancy rates may fluctuate depending on location and grade.
Retail Sector Resilience:
- Surge in consumer confidence and disposable income, alongside expanding FMCG and fashion retail, will support leasing activity.
- International and regional brands continue expanding footprint, boosting demand in shopping malls and street-front spaces.

Industrial and Logistics Sector

Strongest Growth Outlook:
- FDI inflows into manufacturing and e-commerce logistics will drive warehouse and industrial park expansion.
- Secondary industrial provinces such as Bac Ninh, Long An, Binh Duong, and Thai Nguyen are forecasted to outperform.
Cold Storage and Last-Mile Logistics:
- Rapid growth expected in segments serving food delivery, pharma, and e-commerce sectors.

Hospitality and Tourism Real Estate

Sustained Post-COVID Recovery:
- Tourist arrivals continue rising in 2025, supporting recovery in hotel occupancy and RevPAR.
- Growth is shifting toward midscale, green-certified, and digitally integrated hospitality models.
- Emerging destinations such as Phu Yen, Gia Lai, and Dak Lak offer long-term investment opportunities.

Summary Table: Sector Performance Forecast – Vietnam Property Market 2025

Sector	Outlook	Key Trends
Residential	Bullish	Price increases, limited new supply, demand from genuine buyers
Commercial	Moderate Growth	Stable rents, expanding international retail brands
Industrial & Logistics	High Growth	FDI-driven expansion, logistics demand, growth in secondary hubs
Hospitality	Accelerating	Recovery in tourism, midscale and sustainable models rising

Recommendations for Key Stakeholders: Strategic Actions for Long-Term Stability

For Policymakers

Fast-Track Legal Implementation:
- Ensure timely enforcement and local compliance with the Land Law 2024, Housing Law 2023, and Real Estate Business Law 2023.
- Address provincial inconsistencies and bureaucratic backlogs delaying project approvals.
Scale Up Affordable Housing Initiatives:
- Launch targeted incentives for social and workforce housing.
- Consider raising income eligibility caps to expand beneficiary coverage.
Improve Capital Allocation Efficiency:
- Guide bank and institutional capital toward non-speculative developments that support social and economic infrastructure.
Sustain Infrastructure Investments:
- Continue funding for urban transport, regional expressways, metro systems, and aerotropolis developments.
- Encourage PPP models to unlock private capital for large-scale infrastructure.

For Property Developers

Align with Real Market Demand:
- Prioritize projects tailored to middle-income buyers, young families, and first-time homeowners.
- Offer competitive pricing, functionality, and live-work-play environments.
Broaden Capital Base:
- Adopt alternative financing mechanisms:
  - REITs
  - Mezzanine capital
  - Joint ventures
  - Green bonds
Embed Green and Smart Technologies:
- Integrate LEED/EDGE certifications, smart utility systems, and IoT-enabled energy solutions.
- Develop tech-enabled residential projects with contactless living features, digital property management, and enhanced energy efficiency.
Strategic Land Acquisition:
- Target suburban zones with future metro access, new ring roads, or adjacent to industrial zones.
- Monitor development corridors like Long Thanh, Dong Nai, and Thu Duc City for first-mover advantage.

For Institutional and Retail Investors

Enhanced Due Diligence Protocols:
- Scrutinize project legal status, developer solvency, and credit exposure.
- Evaluate FDI inflow data, infrastructure roadmaps, and zoning updates to identify high-growth submarkets.
Diversify Investment Portfolios:
- Combine resilient segments such as:
  - Industrial real estate
  - Retail warehouses
  - Midscale hospitality
  - Sustainable office developments
Adopt a Long-Term Horizon:
- Focus on value creation over time, recognizing that full post-crisis recovery will be gradual.
- Evaluate properties with rental yield potential, capital appreciation upside, and low holding costs.

Future-Focused Considerations

Balancing Growth with Sustainability:
- Rising prices, if left unchecked, risk destabilizing the demand base—particularly for younger urban buyers.
- A disciplined supply-demand framework is essential to avert volatility.
Vietnam’s 2045 Vision:
- The national ambition to become a high-income economy by 2045 underlines the importance of:
  - Smart city development
  - Sustainable construction
  - Inclusive housing ecosystems
- Real estate will play a central role in achieving this transformation.
Public-Private Synergy Is Vital:
- For Vietnam to harness its full potential, the government must provide favorable regulatory environments, while the private sector must deliver innovative and socially aligned real estate solutions.

Conclusion

Vietnam’s property market in 2025 stands at the threshold of a pivotal transformation, shaped by a confluence of structural reforms, demographic momentum, rising foreign investment, and rapid infrastructure development. The turbulence of previous years, marked by legal bottlenecks, liquidity challenges, and macroeconomic uncertainties, has catalyzed a necessary realignment—ushering in what industry experts increasingly regard as the beginning of a more disciplined, transparent, and strategically focused growth cycle.

The outlook for Vietnam’s real estate sector in 2025 is one of cautious optimism, supported by a fundamental shift away from speculative growth toward genuine demand-driven development. Anchored by a population surpassing 100 million—with a robust working-age demographic and a rapidly expanding middle class—Vietnam’s domestic consumption base continues to deepen, thereby strengthening residential and commercial property demand in both Tier 1 and Tier 2 cities.

A Reform-Backed Recovery and Forward-Looking Vision

The comprehensive legal reforms rolled out in 2023 and 2024, including the revised Land Law, Housing Law, and Real Estate Business Law, are laying the groundwork for a more transparent and equitable property development environment. These policy shifts not only aim to remove long-standing legal ambiguities that previously stalled thousands of projects but also improve investor confidence by enhancing procedural clarity and regulatory predictability.

Moreover, the Vietnamese government’s strategic emphasis on infrastructure-led growth has amplified the investment potential across the property landscape. From expressway expansions and metro line developments to major logistics corridors and smart city pilots, infrastructure is not only unlocking new land banks but also reshaping urbanization patterns—creating vibrant suburban ecosystems and catalyzing the decentralization of real estate investment from traditional urban cores.

Industrial, Hospitality, and PropTech: Emerging Growth Pillars

Beyond residential and commercial developments, 2025 is witnessing significant momentum in Vietnam’s industrial, hospitality, and technology-enabled real estate segments. Industrial parks, warehouses, and logistics assets are benefitting from strong FDI inflows and Vietnam’s ascent as a regional manufacturing hub, particularly in high-value sectors such as semiconductors, electronics, and renewable energy.

Simultaneously, the resurgence of international tourism is reviving the hospitality real estate sector. The shift toward midscale and eco-conscious travel experiences—bolstered by digital-first guest services and green-certified accommodations—signals a diversification of demand that aligns with global trends in sustainable tourism and experience-driven travel.

Meanwhile, the rise of PropTech and the accelerated adoption of green building standards are not mere industry trends but foundational pillars for the next chapter of Vietnamese real estate. From AI-powered property search platforms to energy-efficient smart buildings, these innovations are redefining value propositions for both developers and consumers—enhancing operational efficiency, environmental performance, and user satisfaction.

Challenges Persist, but Opportunities Abound

Despite the promising outlook, challenges remain. Persistent supply shortages, especially in the affordable housing segment, coupled with surging land and construction costs, continue to pose barriers to equitable access and inclusive growth. Financial vulnerabilities—such as bad debts in the banking sector, delays in credit disbursement, and the underdeveloped corporate bond market—highlight the need for more diversified and resilient funding mechanisms.

Nevertheless, these headwinds are not insurmountable. In fact, they underscore the importance of strategic realignment across all stakeholder groups:

Policymakers must continue refining regulatory mechanisms, accelerating project approvals, and incentivizing the development of social housing and sustainable infrastructure.
Developers need to focus on long-term, value-driven projects that address real market demand, incorporate green and digital innovations, and tap into new growth corridors created by infrastructure.
Investors should embrace a forward-looking approach, diversify across sectors and geographies, and prioritize projects with strong fundamentals and transparent governance.

Looking Ahead: A Real Estate Market Maturing for the Long Term

Vietnam’s property market is no longer just a frontier of rapid, high-return investment; it is becoming a structured ecosystem marked by long-term value creation, urban transformation, and rising international stature. The government’s Vision 2045—to become a high-income nation—places the real estate sector at the heart of national development, requiring alignment with broader goals of green growth, digital transformation, and social inclusion.

By 2025, Vietnam’s real estate industry is evolving from speculative adolescence to a more mature, strategically aligned market. The combination of demographic vitality, investor confidence, legal clarity, and infrastructure progress provides fertile ground for responsible and sustainable development.

For developers, investors, policymakers, and stakeholders across the value chain, the message is clear: Vietnam’s property market in 2025 is not just recovering—it is redefining itself. And for those who can anticipate emerging trends, act on data-driven insights, and align with national priorities, the opportunities ahead are not only numerous but transformative.