Amid issues of varying concern, Vietnam’s real estate market still boasts potential for growth over the medium and long term.

Figures from the National Statistics Office at the Ministry of Finance (MoF)
reveal that the construction and real estate sectors have contributed an average
of around 10 per cent of Vietnam’s GDP over recent years, which is only about half
the regional average. Real estate assets, meanwhile, currently account for some
21 per cent of total economic assets; well below the 35 per cent typical in developed
economies. The figures, according to the Vietnam Association of Realtors (VARS),
underscore the sector’s significant untapped potential for medium and long-term
growth.

Overheated market

In its latest report, VARS noted that Vietnam’s real estate market is increasingly
asserting its vital role in the economy, drawing growing attention from the public,
investors, and policymakers alike. However, VARS also highlighted persistent weaknesses
in the country’s real estate market, warning of unsustainable growth and a potential
housing bubble as prices soar far beyond real incomes.

Most new supply targets high-end, investment-oriented projects, including speculative
buyers. Even in suburban areas once expected to offer affordable options, prices
remain far above average incomes and are only “relatively lower” than in city centers.
Meanwhile, the strongest demand lies in the affordable segment. “This imbalance
has driven apartment prices in major cities sharply higher, setting new benchmarks
that outpace income growth and further erode home ownership opportunities,” the
VARS report noted.

Mr. Nguyen Van Dinh, Chairman of VARS, illustrated the affordability challenge:
“For a two-bedroom urban apartment priced at VND5 billion ($192,000), a household
earning VND50 million ($1,920) a month would need eight years to buy it if they
saved all of their income, or 25 years if they set aside no more than one-third
on housing.” He added that surging property values mainly enrich existing asset
holders, while most people feel poorer as housing costs rise faster than wages.
Without timely intervention, VARS warned, this wealth gap could solidify across
generations, posing risks to social welfare, urbanization, and sustainable growth.

To cool the market while supporting healthy development, VARS proposed several
measures.

First, accelerate
the rollout of new legal frameworks and strengthen local enforcement, giving localities
more flexibility to tailor policies and efficiently address site clearance bottlenecks
while safeguarding residents’ rights.

Second, diversify
capital sources to reduce dependence on bank credit by restructuring the corporate
bond market and developing national housing funds and real estate investment trusts
(REITs).

Third, prioritize
affordable and social housing in urban planning, linking development with transport
infrastructure such as metro lines, ring roads, and expressways, and building a
professional rental market to ease pressure on home ownership.

Fourth, establish
early-warning systems and market monitoring tools to detect speculation, supply-demand
imbalances, and abnormal price surges, enabling regulators to intervene proactively.

Fifth, develop a unified, transparent national database on land, housing, and
real estate transactions to improve policymaking, enhance transparency, and curb
speculation and manipulation.

Towards a fairer housing landscape

The Ministry of Construction (MoC) said that, in recent years, Vietnam’s real
estate sector, especially in major cities and rapidly-urbanizing areas, has exhibited
signs of instability, undermining housing affordability and healthy market development.

Meanwhile, regulatory tools such as taxes, credit policies, land use planning,
and State land pricing remain fragmented and ineffective, falling behind market
dynamics. As a result, many Vietnamese, particularly young people, workers, and
public servants, are finding it increasingly difficult to buy a home.

To address these issues, the MoC is working with other agencies to propose
several key actions to the government. These include reviewing and updating housing
and real estate regulations to remove bottlenecks; urging localities and developers
to accelerate social housing construction to meet the target of 1 million units
by 2030; and revising Decree No. 94/2024/ND-CP to establish a unified national housing
and real estate database.

The Ministry is also considering a pilot model for State-run “real estate and
land use rights trading centers” to increase transparency, and is coordinating with
the MoF to finalize the legal framework for a national housing fund.

On November 10, the MoC reported to the Prime Minister on a draft government
resolution designed to control and cool property prices. The resolution would create
a legal framework to gradually bring housing prices closer to real income levels,
especially for low and middle-income groups, while making the market more transparent
and limiting speculation and price manipulation. It would also ensure greater policy
consistency across land, investment, credit, taxation, and developer selection.

A key measure will be to cap developer profit margins in the affordable segment
to help lower costs, expand supply, and correct market imbalances. The goal is to
make commercial housing more accessible, stabilize prices, and strengthen social
welfare and macro-economic stability.

Building the foundations

Despite the existing challenges, industry insiders remain optimistic about
the long-term outlook. According to Mr. Neil MacGregor, Managing Director of Savills
Vietnam, the market will be shaped by three key forces over the next decade: a more
transparent and stable legal framework; stronger FDI inflows driven by faster approval
processes; and rapid infrastructure growth unlocking suburban markets and boosting
both affordable housing and logistics development.

“Today, the key foundations for Vietnam’s real estate growth have been established,”
he said. “The new Land Law, Law on Housing, and Law on Real Estate Business together
create a solid legal framework for healthier, more sustainable development. This
will allow regulators to accelerate project approvals, ease supply pressures, and
bring more products to the market, which is a crucial step towards stable growth,
controlled price increases, and long-term housing sustainability.”

He added that Vietnam’s stable economic outlook, coupled with rapid, coordinated
infrastructure investment, will further drive real estate growth. “Emerging trends
such as smart urban development, AI integration in property technology, and sustainable
construction are reshaping the landscape,” he explained. “Affordable housing will
also remain a central focus, supported by stronger public-private partnerships and
more comprehensive development strategies.”

Meanwhile, Mr. Troy Griffiths, Deputy Managing Director of Savills Vietnam,
believes Vietnam enjoys a rare combination of strong growth, a young population,
policy reforms, and large-scale infrastructure investment. “These will form the
basis for a decade of sustainable growth in which real estate continues to play
a pivotal role,” he said.

He also noted that overall FDI in the third quarter maintained steady and higher-quality
growth and FDI in real estate remained quite positive. Notably, Hanoi attracted
$3.5 billion in foreign investment, with more than $3.1 billion directed to real
estate; clear evidence of strong investor confidence. Alongside this, $49 billion
in infrastructure investment is being rolled out, including the North-South Expressway,
the Long Thanh International Airport, new ring roads, and LNG projects. Once completed,
this network will reshape Vietnam’s urban map, connecting new growth hubs and expanding
development into emerging cities. With rapid urbanization, satellite cities will
become the next frontier of real estate development.

Mr. Dinh added that despite the short-term challenges, the long-term outlook
remains highly promising thanks to strong real housing demand and rapid urbanization.
As the economy grows, segments such as residential, industrial, office, and retail
real estate are expected to maintain steady demand.

VET-Phan Duong