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Real Estate
28 December 2024

Vietnamese Real Estate Market Trends Leading To 2025

Rising construction costs and legal reforms significantly reshape investment dynamics.

The Vietnamese real estate market is undergoing significant transformations as it heads toward 2025, fueled by rising construction material prices and important legal reforms aimed at enhancing market transparency and investor confidence. Recent statistics from the Ministry of Construction reveal the national construction price index for 2024 has risen by 0.24% compared to the previous year and surged 15.35% since 2020, reflecting community trends and economic pressures.

This upward trend presents both challenges and opportunities for real estate investors. The persistent increase in construction costs, driven by inflation, has reshaped investment strategies, with many investors now focusing on sustainable properties generating steady cash flow rather than relying on capital appreciation alone. The government's recent legal reforms, including new laws on land and housing, aim to clarify property transactions and strengthen investor protections, creating a more favorable environment for long-term investment.

Among the most noteworthy changes are the Land Law 2024, the Housing Law 2023, and the Real Estate Business Law 2023, which have broadened regulations across various property types and emphasized the importance of financial and legal competency among investors. According to experts from Avison Young Vietnam, these enhancements have significantly improved the investment climate, encouraging targeted investment toward viable properties.

Regional markets are responding positively; provinces around Hanoi, including Bac Ninh, Bac Giang, Ha Nam, and others, are witnessing increased interest from investors. The infrastructure improvements and the rise of large urban project developments are driving up property values. For example, current prices for residential land plots in certain areas of Bac Ninh now range from 25 to 145 million VND per square meter, with market interest growing especially for clean land with clear legal documentation.

Market analysts have noted this shift from speculative investment toward grounded strategies as investors prioritize safety and sustainable returns. Traditionally, lands priced below two billion VND have already witnessed price increases of 5-10% over recent months, with demand particularly heating up on the outskirts of Hanoi. Notably, there are signs of localized price surges, with increases between 10-20%, leading to predictions of market normalization by the second quarter of 2025.

Investor sentiment has also shifted, with stakeholders now increasingly seeking properties with immediate income potential rather than speculative future gains. This shift is complemented by new project launches such as the Tokyu Retreat—a luxurious spa resort—aimed at affluent investors. Positioned just one hour from Hanoi, this development taps directlyinto the growing trend for sustainable, income-producing real estate ventures.

The comprehensive legal reforms, coupled with rising construction costs, lay the foundation for the next evolutionary stages of the Vietnamese real estate market. Firms and individuals engaging with these developments will need to deploy effective strategies to capitalize on changing trends. With careful planning and strategic long-term vision, investors have the opportunity to thrive amid the tumultuous but promising Vietnamese real estate environment heading toward 2025 and beyond.

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