Vietnam Real Estate Market: Growth in Hanoi, Stagnation in Ho Chi Minh City

Vietnam’s residential real estate market is showing divergent trends: Hanoi is experiencing strong price growth and rising demand, while Ho Chi Minh City continues its gradual recovery from a slowdown. According to Global Property Guide, the main drivers include economic expansion, legal reforms, and increased supply.

Transactions and Prices: 2024–2025

In 2024, Vietnam’s housing market began to emerge from stagnation: over 47,000 transactions were recorded, with 72% of total housing supply sold. Apartments made up the bulk of sales. Demand was fueled by lower interest rates, increased foreign investment, and economic recovery. Hanoi saw rising sales and prices, while Ho Chi Minh City remained subdued: the average price rose only 1.4% year-on-year, with limited new project launches and low supply, especially in the budget segment.

In 2025, trends solidified. The average apartment price in Hanoi reached $2,865 per sq. m — a 29.6% increase from last year. Sales rose 49% year-on-year, although they fell compared to Q4 2024. Most demand was concentrated in the mid-range (Grade B) segment, with nearly 85% of sales coming from newly launched units. Townhouse and villa sales also doubled year-on-year.

In Ho Chi Minh City, the average apartment price in Q1 2025 was $3,316 per sq. m — up 1.5% year-on-year and 1.6% quarter-on-quarter. However, sales fell 46% from the previous quarter, totaling around 1,400 transactions. Primary supply remained constrained: just 89 new villas and townhouses were launched, and the share of units priced under $382,000 dropped to 11%.

Key Factors

Analysts attribute Hanoi’s growth to several factors, the most important being the implementation of new land, housing, and real estate laws. These reforms simplified procedures, strengthened legal protections, and stimulated buying activity. Major projects with upgraded infrastructure are nearing completion, with Savills reporting that just three developments — Vinhomes Ocean Park, Smart City, and Global Gate — accounted for almost 90% of Q1’s new supply. In the villa segment, Vinhomes Wonder City was the primary driver.

In contrast, Ho Chi Minh City’s market is hampered by weak demand and high prices. The premium segment dominates: 70% of new supply is priced above $1.15 million. Many projects are delayed or awaiting permits. However, authorities are actively removing legal obstacles, and improvements are expected later in 2025.

According to CBRE, 2025 has been a turning point for Vietnam overall: landmark legal amendments took effect, large-scale construction began, and foreign direct investment surged. The economy is also expanding — GDP grew 7.96% in Q2 2025, while FDI reached $11.7 billion. The real estate sector attracted $5.17 billion in H1 2025 — 24% of total inflows.

The outlook remains cautiously optimistic. Hanoi is set to deliver another 7,400 units by year-end, with 99 new projects scheduled from 2026 onward. Ho Chi Minh City’s budget housing shortage will persist, but upcoming phases of large-scale developments should ease the situation. In the long run, urbanization, affordable financing, and increased suburban supply will support market growth.

Foreign Investment and Legal Framework

Vietnam’s real estate market is becoming increasingly accessible to foreign investors, Vietnam Briefing reports. Legislative changes enacted in 2024 simplified the process for foreign citizens and companies to purchase residential and commercial property. Foreign buyers can acquire apartments and houses, but land remains state-owned. Quantitative limits apply: no more than 30% of units in a single building and up to 350 properties per administrative area.

The market faces several challenges, the most significant being the shift toward the premium segment: around 70% of new supply targets wealthy buyers. Affordable housing remains scarce, prompting the government to expand social housing programs. Limited access to financing and liquidity fluctuations affect both buyers and developers — especially in Ho Chi Minh City. While lending rates are falling, access to credit remains a key factor for project delivery.

For investors, understanding the legal environment, infrastructure quality, and demand patterns is crucial. Only by considering these factors can one operate effectively in Vietnam’s fast-growing but uneven and still volatile real estate market.