Vietnam’s real estate sector has evolved rapidly over the past decade, reflecting Vietnam’s broader economic transformation and urbanisation. Foreign direct investment (FDI), infrastructure development, and a burgeoning middle class are propelling demand across residential, commercial, industrial, and hospitality sectors. Despite challenges such as regulatory complexities and market fluctuations, the outlook for real estate in Vietnam over the long term is promising as the country continues to position itself as a key player in the Southeast Asian market.
Key Market Trends in 2024
Over the last year or so, the Vietnam residential real estate market has faced a supply crunch across all segments. Only 52 commercial housing projects were completed in 2023, delivering around 16,000 units, which is less than half the number produced in the previous year, 2022, according to the Ministry of Construction.
Additionally, real estate consultancy CBRE Vietnam reported a sharp decline in apartment supply, with a 40 percent drop in the number of available units in both Hanoi and Ho Chi Minh City. Specifically, the apartment supply fell to 10,100 units in Hanoi and 8,600 units in Ho Chi Minh City in 2023, marking a substantial year-on-year decrease.
The overall slowdown in the property market is further evident in transaction volumes. By the end of the third quarter of 2023, the total number of transactions in the market had decreased by 59 percent, with only 324,700 transactions recorded, according to VN Express.
Residential Real Estate
Although the residential real estate market in Vietnam has faced and continues to face challenges. However, as these challenges ease, growth is likely to come back strong, fueled by a growing middle class, an increasing number of young urban professionals seeking modern housing solutions.
High-rise condominium developments continue to dominate in major cities, with demand for both luxury and affordable housing. The trend toward vertical living is driven by limited urban land and a preference for modern amenities.
In response to government initiatives to address housing affordability, developers are increasing their focus on mid-tier and affordable housing projects to cater to middle-income buyers. This segment has strong demand, particularly in cities where housing prices have surged.
Box 1: The current state of Vietnam’s real estate market recovery
At the beginning of 2023, construction work on buildings in Vietnam was slowly winding down as the real estate industry ground to a halt. Hard hats were hung up and cranes ten stories high fell dormant leaving the cement shells of unfinished residential towers standing dark and empty–cold reminders that Vietnam’s real estate market was not in good shape.
This was due to a number of factors but in short, the Evergrande crisis in China in 2022, had led Vietnam to take a long hard look at its own real estate industry, and what it found was not good. The misuse of investor funds, particularly those acquired through the bond market, was rife, and a number of real estate firms were grossly over-leveraged. These revelations then went on to spook investors and consequently, the market took a sizable downturn…
Read more: Vietnam’s Real Estate Market Recovery 2024: Unpacked
Urbanisation and Infrastructure Development
Vietnam’s rapid urbanisation is a major force shaping the real estate industry. By 2024, around 40 percent of the population will live in urban areas, with major cities like Ho Chi Minh City (HCMC) and Hanoi at the forefront of the demand for housing and commercial space. Infrastructure development—such as the expansion of metro lines, highways, and airports—has been critical in unlocking real estate growth in suburban and previously underdeveloped areas.
Ongoing projects like the Long Thanh International Airport near HCMC, metro lines in both HCMC and Hanoi, and improved highways linking industrial zones and urban centres are boosting property values in surrounding areas.
Commercial Real Estate
The commercial real estate sector in Vietnam is experiencing growth across retail, office, and mixed-use developments.
Demand for Grade A office space in central business districts (CBDs) remains high, particularly in HCMC and Hanoi. The rise of multinational corporations, startups, and the growing digital economy has spurred demand for modern, tech-enabled office environments. Co-working spaces are also expanding, reflecting the flexibility required by the dynamic business environment.
As consumer spending rises and e-commerce grows, the retail real estate market is seeing a shift towards more modern shopping malls, lifestyle centres, and mixed-use developments. International brands continue to enter Vietnam, boosting demand for prime retail locations.
Driven by the growth of e-commerce, logistics and warehousing space demand is increasing in 2024. Industrial parks and logistics hubs in Binh Duong, Long An, and Hai Phong are expanding, as businesses seek more space for distribution centres to meet the rise in online shopping.
Industrial Real Estate and Manufacturing
Vietnam has cemented its role as a regional manufacturing hub, attracting significant foreign investment in industrial real estate. In 2024, the demand for industrial parks and logistics facilities continues to grow due to Vietnam’s strategic location, trade agreements, and competitive labour costs.
Major manufacturers, particularly from countries like China, Japan, South Korea, and the US, are expanding their operations in Vietnam. This trend is driven by Vietnam’s participation in trade agreements such as the CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) and RCEP (Regional Comprehensive Economic Partnership), making the country an attractive destination for global supply chains.
New industrial parks are focusing on high-tech industries, electronics, and renewable energy sectors, attracting foreign companies looking to diversify production bases in Asia.
Hospitality and Tourism Real Estate
Vietnam’s tourism industry has been recovering after the pandemic, and 2024 sees a resurgence in hospitality real estate.
Vietnam’s coastal areas like Phu Quoc, Nha Trang, and Da Nang are hot spots for luxury resorts, eco-tourism projects, and hotel developments catering to international tourists. The increasing number of tourists, especially from Asia and Europe, is driving the demand for high-end accommodations.
The popularity of condotels (condominium hotels) and vacation home investments continues in 2024. These properties offer an appealing investment opportunity for both local and foreign buyers seeking rental income and vacation use.
Foreign Direct Investment in Real Estate
Vietnam remains a top destination for foreign investment in real estate, supported by favourable government policies and an attractive investment environment.
Foreigners are allowed to buy up to 30 percent of units in a condominium project and 10 percent of properties in a landed project. These regulations, introduced in 2015, have continued to attract foreign buyers, particularly from China, South Korea, and Japan.
In addition to HCMC and Hanoi, coastal cities like Da Nang and Phu Quoc are gaining attention from foreign investors due to their tourism potential and development opportunities.
FDI in Real estate business activities, 2024, US$000s
| New Projects | New Registered Capital | |
| January | 10 | 1,243,581 |
| February | 4 | 161,501 |
| March | 4 | 178,182 |
| April | 7 | 148,631 |
| May | 6 | 245,055 |
| June | 6 | 494,583 |
| July | 5 | 399,837 |
| August | 11 | 490,000 |
| Total | 53 | 3,361,370 |
Box 2: Investing in real estate projects in Vietnam
Investing in real estate projects in Vietnam offers significant opportunities for foreign firms, driven by the country’s economic growth, urbanisation, and rising demand for residential, commercial, and industrial spaces. However, navigating the market requires a thorough understanding of local regulations, investment structures, and cultural nuances.
Read more: Investing in Real Estate Projects in Vietnam for Foreign Firms 2024
Challenges in 2024
Regulatory Complexity and Land Use
While the government has taken steps to streamline procedures, navigating Vietnam’s legal framework for real estate can still be challenging, particularly concerning land use rights. The Land Law, which governs property ownership and usage, remains a topic of debate, especially regarding transparency and fairness in land acquisition.
Although foreign ownership rules have been relaxed, there are still restrictions in place that can complicate property purchases for international investors.
Investors face bureaucratic hurdles, including lengthy approval processes for real estate projects, zoning regulations, and issues related to obtaining land use certificates.
Supply Chain and Construction Delays
Global supply chain disruptions, rising material costs, and labour shortages are impacting Vietnam’s construction industry. Developers in Vietnam face challenges related to increased costs for raw materials like steel and cement, as well as delays in completing projects due to supply chain constraints.
Oversupply Risks in Certain Segments
Certain real estate segments, particularly high-end condominiums and hospitality, face potential oversupply. In major cities like HCMC, luxury housing projects may outpace demand from buyers, leading to concerns about market saturation. Similarly, in coastal areas, an overabundance of hotels and resorts could impact occupancy rates and profitability.
Government Policies and Regulations
Law on Land
Last year, a revised Land Law passed Vietnam’s National Assembly. This revised law has the potential to have a huge impact on Vietnam’s land market and could speed up foreign-invested projects considerably. With this in mind, this cheat sheet runs through the key changes in the new Land Law and how this might impact foreign firms doing business in Vietnam.
Law on Real Estate Businesses
The Law on Real Estate Businesses, enacted by the National Assembly of Vietnam, marks a significant update to the regulatory framework governing the real estate sector. This new law aims to address various challenges within the industry by focusing on transparency, consumer protection, and sustainable development.
Law on Housing
Vietnam’s Law on Housing 2023, enacted by the National Assembly, introduces several key reforms and updates to the housing sector. The law aims to address current challenges, promote sustainable development, and enhance housing access and quality for all citizens.
Box 3: Starting a real estate business in Vietnam
Starting a real estate business in Vietnam presents many opportunities, as the country’s economic growth and rising incomes are fueling demand for both commercial and residential properties. However, entering the Vietnamese real estate market requires a deep understanding of the country’s business environment, real estate culture, and the regulatory landscape.
Read more: How to Start a Real Estate Business in Vietnam: Ultimate Guide 2024
Future Outlook and Opportunities
Industrial and Logistics Expansion
With Vietnam’s strategic location in the global supply chain, demand for industrial real estate, including factories, warehouses, and logistics hubs, is expected to grow further. Investors are increasingly looking at regions like Bac Ninh, Hai Phong, and Long An for new opportunities in this sector.
Technology and Smart Cities
Vietnam is open to the development of smart cities, with projects in HCMC, Hanoi, and Binh Duong focused on integrating technology and data to improve urban living. These initiatives present opportunities for real estate developers to incorporate smart technology, green spaces, and advanced infrastructure into their projects.
Conclusion
The real estate market in Vietnam is poised for continued growth in 2024, driven by urbanisation, FDI, infrastructure development, and increasing demand across residential, commercial, and industrial sectors. While challenges remain, such as regulatory hurdles and supply chain disruptions, the long-term outlook remains positive, with significant opportunities for both local and foreign investors in Vietnam’s dynamic real estate landscape.
Vietnam’s regulatory environment, however, is dynamic and can change quickly. With this in mind, to keep abreast of changes to said regulations, foreign firms operating in Vietnam should make sure to subscribe to the-shiv.