The Vietnam real estate market is undergoing significant changes as supply increases yet prices remain stubbornly high. According to the Vietnam Real Estate Brokers Association (VARS), new housing projects set to launch in 2025 are attracting interest and facilitating transactions, though the speed of absorption is anticipated to slow. Notably, the apartment sector continues to dominate market liquidity, particularly concentrated around large urban developments.
Despite signs of improvement, the supply still lags behind actual demand. A recent market bulletin indicated prices for apartment units remain high, reflecting the concentrated offerings coming from large-scale urban projects. "The price for apartments is still anchored at high levels," stated Bui Van Doanh, highlighting the continuing affordability issues faced by prospective buyers. Indeed, as of now, prices have seen slight adjustments since late 2024, making transactions more challenging.
The demand side is showing signs of weakness, with potential homebuyers tightening their purses amid rising property costs, leaving many sellers to slightly reduce prices to appeal to hesitant buyers. Investors who previously benefited from significant price increases are now faced with the reality of lower profit margins.
VARS predicts supply will grow by around 10% this year, primarily through the alleviation of previous obstacles hindering project launches. This growth is expected mainly from high-end apartments priced over 50 million VND per square meter, which are projected to lead the market recovery. Nonetheless, with market prices already elevated and many older apartment units lacking infrastructure, secondary market price growth is expected to decelerate, showing rates of increase between 7% to 10% from last year.
The iron grip of inflation within major city real estate markets is leading some investors and homebuyers to seek opportunities beyond urban centers, particularly to secondary and tertiary cities where prices are more favorable and the potential for growth remains abundant. Le Xuan Nga, CEO of BHS Real Estate Company, shared insights on this shift, noting, "With skyrocketing property prices, investors are starting to migrate to suburban areas or smaller cities, where competition is less fierce and returns might be more favorable."
Evidence from recent trends suggests the demographic shift holds potential. Areas like Thai Binh, Quang Ninh, Thanh Hoa, and Nghe An are increasingly viewed as attractive investment destinations, particularly for those with budgets between 1.5 billion and 2 billion VND. This shift is reportedly fueled by the regions' spacious land characteristics, reasonable prices, and promising growth forecasts.
Le Xuan Nga cautioned, though, about the necessity of solid investment strategies, stating, "Investors need to navigate intelligently through information about land infrastructure, planning, and legalities. The right project will help secure investment returns and protect finances."
Concerns about investment risks are echoed by academic perspectives as well. Nguyen Quang Huy, head of the Finance and Banking Department at Nguyen Trai University, emphasized the need for diligent research before committing capital to peripheral regions. "Investors must avoid rapid speculation and instead focus on markets with stable growth patterns, solid infrastructure, and reputable project developers," he advised.
Overall, the dynamics of the Vietnamese real estate market are shifting, with rising supply and persistent price levels prompting significant changes. For investors and buyers alike, identifying the right opportunities, particularly outside major cities, coupled with careful assessments of future growth potential, could lead to fruitful engagements within the real estate sector.