Transcription
Vietnam's property market is red hot. Those who land in 2010 or in 2015 have multiplied their money many times over.
CI transformed by new apartments, townships, and mega projects where we are actually creating about like 300-hectare plus projects. "According to my estimation, if house prices don't increase too quickly, it will take about 25 to 30 years to be able to own a house."
There are more and more empty projects and unfinished projects. Now, Vietnam's property picture is: "If the real estate market continues like this, it will surely fall into the same context as China in another 10 years." Is it experiencing a boom or bubble?
In the heart of downtown Ho Chi Minh City, Dong Khoi Street stands as a symbol of prosperity and modernity. This main shopping street frequently ranks among the world's most expensive retail locations. Last year, it came in 17th with an annual rental price of around $3,700 US per square meter.
And away from Dong Khoi Street, a lot of Ho Chi Minh City and Vietnam's property market has been running hot. Vietnamese real estate has broadly speaking appreciated strongly over the decades, in particular. "Specifically, Ho Chi Minh City and Hanoi have seen a sudden surge in prices in some areas, with some projects increasing by up to 50-70%, even some projects increasing by 80%."
On average, apartment prices in these two cities rose by around 20 to 30% in 2015. Even second-tier cities like Da Nang saw a 25% rise in the first quarter of this year. Apartment prices in Hanoi reached around 128 million Vietnamese dong or nearly $5,000 US per square meter on average. In Ho Chi Minh City, they stood at about 112 million dong or $4,300 per square meter.
The 2022 market was generally slow, but from 2023 to 2024, it effectively exploded, with apartment prices in certain western and eastern districts rising by 30 to 40% in just 12 to 18 months. "Because in Hanoi now, you can see it is expected to be a hub of big infrastructure projects, for example, like Red River for waterfront cities and the big bridge crossing the river, and expansion projects of major transportation routes." Hanoi puts Hanoi and city housing markets among the rising out of all Southeast Asian cities.
But as prices soar, the market faces an uncomfortable question: Is a bubble forming in Vietnam's property market? "There are very clear signs of a bubble, for example, the prices are increasing continuously, while the number of transactions is decreasing, and the accumulation of unused and unoccupied housing." "Vietnam's real estate market has something that I believe can create very big risks because for several years now, real estate prices have been increasing."
But first, we should note that Vietnam has two main housing segments. Social housing is government-supported and reserved for eligible groups such as lower-income households. Commercial housing is built mainly by private developers and sold on the open market. Most reports of Vietnam's rising property prices refer to the commercial housing market, not social housing.
"One of the reasons that causes prices to increase so high is the imbalance between supply and demand in the market. Currently, the supply is basically not meeting the actual demand of the market. There is a shortage of affordable housing and social housing, while there is an oversupply of high-end housing."
Doan Cong Duc is a young Vietnamese trying to buy a home in the bustling metropolis of Hanoi. The 31-year-old works in the IT industry, while his wife is a tour operator at a French company. He moved to the big city in 2016 from his hometown in Son La, Northwestern Vietnam. "I think anyone who comes to a city will first dream of having a place to settle down, a place to feel secure and build a career. According to my belief, it's 'an cư rồi mới lạc nghiệp' (settle down first, then build a career). And secondly, after having children, I'm quite lazy about the issue of having to move again after a long time, packing things, and moving to a new place."
The family rents a 5 million dong apartment, or roughly $200 US per month, excluding utilities. The two-bedroom apartment houses Duc, his wife, child, and two other family members. They live outside the city. "If we have the same living conditions, if we just move closer to the center by about 5 kilometers, the rent will double, and other costs will increase. So, we are forced to choose to move further away to save money."
Once utilities are included, housing takes up nearly a third of the couple's monthly income. "Of course, with the current price of social housing, around 25 to 30 million dong, if we try hard, it's still within reach, although it will be a bit difficult. As for commercial housing prices, I probably don't dare to think about it."
Ho Chi Minh City and Hanoi are among Asia's affordable cities for home buyers. As of 2026, the average home price in Vietnam is around 30 times the average annual household income. "Real estate prices are increasing daily to the point where even the middle class cannot afford commercial real estate. However, on one hand, prices are rising, but liquidity is decreasing very deeply."
This is called the Vietnam real estate paradox, where prices rise 15 to 20% a year, but average incomes grow by only 8 to 10%. The gap between earnings and property values widens. For the generation born in the 1990s and 2000s, owning a home with earned income has become almost unthinkable. "I always have a feeling that for me, owning a home is like a guarantee of my prudence. Because people say that you can only build a career if you have a home. So, as a mother and father, I have a responsibility to my children, I can't just ignore it, I love my children."
"For example, with the current salary of around 15 million dong, if I don't eat or drink, it will take at least nearly 10 years, at least more than 10 years, if I want to buy a house." If you are just an ordinary person, you will struggle a lot, paying a lot of money with mortgages out of reach for some would-be buyers.
Who then is driving the surge in prices? What's behind the property paradox? "Hello sir. Let me introduce you to the apartment building I just finished building. This apartment building has six floors, four rooms per floor, a total of 20 rental rooms. Currently, there are about 30 households renting here, mainly working people and young graduates. Please come in and visit."
In Hanoi, unfurnished apartments like this are available for rent at $200 US a month. This one belongs to a real estate investor among properties that he owns. "This is a model apartment in this apartment building. The area of this apartment is about 20 square meters. The apartment is fully equipped, including a living room, bedroom, kitchen, and bathroom. Each apartment is fully equipped with a refrigerator, washing machine, range hood, and stove."
35 apartment units are being invested in. "With real estate, you get the advantage that the demand for housing is essential, as the elders say, food, clothing, and shelter are essential needs. Serving the need for housing, I see that this demand is quite large in Hanoi, and it has potential."
Vietnam real estate income to 10%. "So that's what people say about doing business, doing business on other people's problems. The issue of housing demand and land ownership, as well as apartments, will become more valuable because land does not reproduce, and people increasingly want to live in the center."
PropertyGuru Vietnam operates one of the leading proptech platforms in the country. "We did a survey for home buyers. We see that 70% of the buyers are people who live in and then probably 28 and close to 30% are people who are looking for rental income. It's a really small percentage, 3 to 4% are people who flip and sell."
Investors flock to real estate because it's one of the country's best-performing asset classes. Gold is at the top, surging amid macroeconomic instability. Apartments and land plots come next, followed by stocks, with savings and foreign currencies near the bottom. Vietnamese people have traditionally regarded real estate as the safest store of wealth, even more than bank deposits. During 2020 and 2021, in response to COVID-19, the State Bank of Vietnam implemented monetary policy and cut policy rates to ease, inevitably boosting investment, including real estate and equities.
"In strategic areas, some properties in the inner city have doubled or tripled in value. Some suburban properties have even increased tens of times."
Hanoi-based property broker Ngo Quoc Dat started back in 2008. Real estate became more than a career; it was a key to wealth. "I myself have invested quite a lot in apartments, and even some apartments have been rented out, and some have been sold to take profits." "If you hadn't invested 20 years ago, the best time is now."
As Vietnam's economy grew rapidly over the past decade, it created a larger and wealthier affluent class. The top 20% of households now earn more than 40% of national income, giving them the means to buy property as an investment. "As for investing in manufacturing, business, services, and improving quality, all of that is very tiring. But real estate is the easiest thing to do, it's something you interact with daily, bricks, cement, steel, things you can visualize easily."
Owning real estate in Vietnam is considered a symbol of success and wealth, as well as something you can leave to future generations. So everyone has a desire to own property at any cost. Surveys show that buyers favor apartments. These housing types were commonly seen as having the most upside. And the reason for apartment demand is what is happening in major cities. Take Hanoi and Ho Chi Minh City, for example, roughly adding about 1 million people.
"In the last 5 years, you can see that the urbanization rate in Vietnam is very fast. The demand from young people and immigrants in Hanoi is still increasing and is currently increasing strongly in the coming time."
Vietnam's rapid economic growth has attracted another group: foreign professionals. Rent Constant Quigly has called Ho Chi Minh City home for the past four months. "So we came here on vacation, and it was within 3 weeks that my children were like, 'No mom, we want to stay here.'" Constance is an entrepreneur and online educator. She can run her business from virtually anywhere. "Here in Vietnam, the culture and the people, there's a lot more courtesy. So I found that I can work at local cafes, I can work at bookstores, I can work in the park."
A lot of foreigners love to go to Vietnam because of the good environment, good beaches, and the houses are still affordable for them. According to the government, there are over 135,000 foreigners working in Vietnam in 2025, up from roughly 100,000 in 2020. As for Constance and her family, they are looking to rent a serviced unit with three bedrooms. "I think Vietnam is one of the best offers that I have found when looking for housing."
With the red-hot demand for houses, developers are capitalizing. Vinhomes is the largest property developer in Vietnam. Over the past 15 years, it has sold more than 300,000 residential units. The company also owns the biggest land bank in the country. "And in 2018, we started to change to what we call the new city or the mega-project concept, where we are actually creating about like 300-hectare plus projects."
The builder targets locals from middle and upper-income categories while also serving the social housing market. "More recently, because the income of households in Vietnam is rising, I think it's quite fast. And now it makes up 16 to 20% of Vietnam's population. We also actually attract a lot of experts coming in as well. Majority, we can see that Korea, some China as well."
"Vietnam's real estate market in the eyes of international investors, especially in attracting FDI capital, is highly valued, and currently, FDI capital in Vietnam's real estate market is also very good and positive."
Are foreign investors responsible for driving up real estate prices? Then the impact may be small. Vietnam law limits foreign ownership to 30% of the units in a condominium building and no more than 250 landed homes within a designated area. Foreign investors are limited by regulation on the number of foreigners within a single project. Therefore, the primary risk is travel. Instead, developers say part of the housing price hikes is due to rising costs.
"Well, definitely from the developer's side, we can see that the cost of making a house is also rising as well. And one of the changes is that the price of the land where we reimburse to the land occupier previously has increased. So, in turn, the cost of the land the government gives to us also increases as well. The second thing is the construction cost. We talk about construction materials, we talk about oil and petrol, about the labor cost increase."
However, as developers cater to investors in the more affluent segment, some analysts warn of a supply-demand mismatch. High-end apartments are being built while the demand is for more affordable options. The mismatch is not accidental; it follows a clear economic and institutional logic. From developers' profit margins, the land cost, construction cost, and regulatory cost of building a two-bedroom apartment versus a three-bedroom apartment do not differ enormously.
"Although demand is high, developers only like to exploit the high-end segment. The reasons are that this segment has high profit margins, and legal procedures are easier to handle. Meanwhile, for mid-range or social housing, the legal framework and permitting time are very long, leading to very thin profit margins, so it is not attractive to many developers."
Developers are building, and whispers of bubble risk are growing. Vinhomes Ocean Park is a mega project in eastern Hanoi, part of the wider Ocean City development spanning nearly 1,000 hectares across three integrated townships. "So the Vinhomes Township is very different, where we actually create what we call 15-minute cities where people can work, live, and play just in one township."
This upscale residential area is about a 20-minute drive from Hanoi City Center. To plan and develop a mega project like this takes at least seven to eight years. "We have the lagoon and also the green space for the residents to come home and then enjoy. So usually, we go through the submissions, and the government will choose the developers based on the capability and the quality of the proposals."
According to one estimate, developers are constructing at least 27 mega urban projects across Vietnam. Combined, the investments exceed $30 billion US. More than half the total investment is led by major developers, including Vingroup and Sun Group. "So for Vinhomes, in the future, we only do mega projects. When I say mega projects, it's about more than 2,000 to 3,000 hectares onwards."
Across Vietnam, more than 900 projects are under construction, representing a total of some 500,000 housing units. On the demand side, the most fundamental driver is demographic and rapid urbanization. Vietnam has roughly 800,000 to 1 million new urban dwellers each year. That represents genuine organic demand, and households have a real desire to improve their living conditions.
But the building spree has drawn comparisons to Vietnam's northern neighbor and the cautionary tale of its own real estate bubble. From the early 2000s to the late 2010s, China's property boom seemed unstoppable. Home prices soared, developers expanded, and families poured their savings into real estate. But after Beijing tightened restrictions on developer borrowing in 2020, years of debt-fueled growth and oversupply were laid bare. Developers defaulted, projects stalled, and by 2021, a key engine of the Chinese economy began to falter.
Comparing with China, there are several notable parallels. Models heavily rely on land sale revenue, high labor, and outside revenue from land sales in local government finance. So, what are the similarities to China's real estate bubble that might be a warning sign for Vietnam? For one, oversupply. For the first quarter of 2026, total real estate inventory of Vietnamese projects stood at almost 30,000. This includes apartments, individual houses, and land plots. The market slowed in early 2026, with property transactions declining nearly 8% quarter-on-quarter to below 140,000.
"Some people believe that the reason for the rising housing prices in Vietnam is the imbalance between low supply and high demand. I don't believe it because, you know, looking at the high-end segments, it's accumulating a large amount, a large number of unused and unoccupied apartments. The buyers of high-end apartments today are predominantly investors, not occupiers. When vacancy rates are high, estimates of supply, 30 to 40% of units empty, it's clear that supply is serving speculation rather than genuine housing."
Another parallel is developer leverage. At its peak, Chinese developer Evergrande owed more than $300 billion US, with liabilities exceeding five times the company's equity. Vietnamese developers are generally less leveraged, but credit risks remain. "I think developers are facing a lot of challenges in the market right now. Basically, lending rates are high, bond markets have a bad reputation in the past. So it's harder for them to get funding. Looking at the indicators, rise to income ratios are far too high. Rental yields in many areas are only 2 to 3%, while borrowing costs sit at 8 to 9%. Developers are carrying very high leverage. These are general warning signs."
Another comparison lies in how homes are financed. In China, many apartments were sold before construction was completed. Buyers began servicing mortgages long before receiving their homes. When developers ran into financial trouble, some projects were delayed or abandoned, leaving buyers paying mortgages on unfinished properties. Vietnam has a similar presales model. "The practice of selling first and building later is a very good way for developers to take money from buyers quite early without finishing the project. And so, when the project is not finished, the developer faces no punishment at all."
For home buyers, the primary risk is a project not being finished or receiving something that is below par. However, there are important differences between China's and Vietnam's real estate picture, which reduce bubble risks. "Vietnam's population is still increasing, and the main population is still within the working age. So when you are within the working age, definitely you will have the demand for home ownership. The home ownership rate in Vietnam is quite low as well, and the urbanization rate in Vietnam will only reach 50% in 2030. So all of that has a positive impact on the property market that makes Vietnam less system vulnerable."
First, Vietnam's real estate to GDP ratio is substantially lower than China's. Second, the market is far smaller in scale. And third, Vietnamese banks moved to tighten lending at an earlier stage. In fact, Vietnam had previously tightened the market. In 2022, authorities cracked down on corporate bonds and stepped up scrutiny of property developers. At the same time, borrowing costs surged, with some mortgage rates rising to between 11 and 15%. "When policy tightened in 2022 to 2023, several issues were able to service applications, triggering a crisis of confidence across the market."
"During those periods, many cases had to sell off at a loss, cut losses, and so on. Many such activities occurred. Generally, the real estate market in 2022-2023 went down to the bottom, and the speed of decline decreased. At that time, it was a price decrease of about 20 to 30% of the overall value of real estate."
Since the 2022-2023 downturn, Vietnam's property market has rebounded strongly. Now, policymakers are looking to rein in speculation once again. Can it do so while avoiding bubble risks? In Vietnam, one survey found that more than 60% of people under the age of 35 in large cities prefer renting to buying homes. The main reason is to avoid the financial stress of repayment as home prices rise. It's a choice that IT worker Duc and his wife made as well. "Because actually, if for the same house, buying it costs 1.5 billion dong, but if you buy a package for about 40 years, the total payment will be about 3 to 4 billion dong. It means I have to pay three to four times the amount I borrowed, so the time it takes to pay it back is much longer."
However, despite social and economic challenges, housing is a basic need. When young workers, factory employees, teachers, and doctors cannot buy where they work, the knock-on effects are substantial: labor mobility disruption, social instability, and a long-term drag on productivity and economic competitiveness. "Yes. That is a tradition passed down from ancient times with proverbs and sayings like 'a large house with wide doors is for the upper class.' It means you must have a piece of land to call your own to feel secure. That is, you must 'an cư' (settle down) to 'lạc nghiệp' (build a career)."
This has been taken up at the highest levels. Last year, at a government meeting, then Vietnamese Prime Minister Pham Minh Chinh called for the cooling of real estate prices, saying many people could not afford to buy property. "Even the government knows that the Prime Minister, the former Prime Minister, criticized this very much, very badly, when he complained that 'who the hell can buy your apartment?'"
"This is also an issue that the Vietnamese government is very concerned about and is developing solutions to stabilize market prices." When China moved to cool its property market in 2020, the slowdown spread far beyond real estate and impacted the economy for years. That's because nearly 30% of China's GDP was tied to real estate and related industries. Vietnam is less dependent on property, but the sector remains an important driver of its economy. "Its related industries, construction, building materials, financial services, contribute probably 11 to 12% of GDP directly. When indirect multiplier effects are included, the figure rises to 15 to 17%."
So, Vietnamese authorities are taking a measured approach, trying to cool the market without derailing its recovery. "So, the direction is to both remove obstacles and tighten control. Especially for foreign investors, there are also mechanisms and policies to create favorable conditions and transparency for domestic investment and business, as well as to attract foreign investment to ensure international practices. This is to both leverage domestic resources and create opportunities and resources from foreign parties when investing in Vietnam."
Vietnam's central bank is also tapping the brakes. It instructed banks not to let property lending grow faster than overall lending. "Another solution here is that the government is also coordinating with the State Bank of Vietnam to introduce appropriate credit control measures to ensure market regulation through credit. This is to ensure that real estate projects that are prioritized for loans are those that invest in line with market trends, plus lending to people who have actual housing needs to limit speculation."
"I think that is a healthy filter that pushes out the unhealthy ones and keeps in the people who are really serious about the business and who will be able to fulfill all the requirements to build up high-quality projects for the buyers." Meanwhile, the Ministry of Construction has proposed a series of solutions, such as restricting loans for buyers purchasing multiple properties, reserving at least 30% of housing projects for affordable homes, as well as requiring transactions to take place through a state-run trading center. "They want to say that the house is to live in, not to earn money, not to sell for foreign profit at all. But it's difficult because, you know, I think Vietnam needs to change to reverse the situation. Even people who primarily buy to live in a property still expect it to appreciate over time. The line between buying to live and buying to invest is extremely blurred."
"And most recently, the General Secretary has also directed us to research the rental housing model. Rental housing here will have forms of state rental housing, encouraging and motivating non-budgetary investments for rental at appropriate prices to ensure that everyone has a place to live. And from 2023, the government has set a plan with the determination to build 1 million social housing units by 2030. With the direction and support of state mechanisms and policies, this 1 million social housing unit plan may be completed ahead of schedule."
Van does freelance work as a chef, cooking at restaurants. "When I rent these two rooms, each room is 24 square meters, meaning it's very small, sir. When the children study, it's very difficult, so it's often too cramped. I just want it to be airy, not necessarily beautiful. As long as there's a stable place to live." Each month, they pay $300 US in rent, or 30% of their monthly income. They are hoping to secure a social housing unit for a more comfortable environment. Hanoi and Ho Chi Minh City social housing projects often attract several times more applicants.
"This is very difficult, isn't it? Life is very difficult these days. Earning a living is very difficult now, so to say that I can buy a house, I don't know when that will happen. So, we'll just take it as it comes and try our best."
On the supply side, there is another solution. Across the country, some 4,500 projects are facing legal bottlenecks. Resolving them to get construction back on track could boost supply and ease prices. So, can Vietnam tame its property market without bursting it? Its strategy now is to cool speculation, tighten financing, and boost housing supply.
"The lesson from China is that we have a very big lesson. So, creating supply and creating regional transportation links to allow people to move out of the inner city, as well as urban areas in the provinces adjacent to Hanoi or Ho Chi Minh City, large cities, so that people can work in their own localities without having to travel far, without having to concentrate in the city center to work."
"Without any reform, I think it's quite difficult to avoid the footsteps in China and Japan. The whole banking system and the whole economy will be pushed to the edge of crisis and a very, very difficult situation." "The context of China and Vietnam's real estate development is exactly the same. So, the only difference is that China's economy is very large, so the solutions are always delayed compared to the requirements because the economy is too heavy. Vietnam's economy is thinner, so the solutions can be applied immediately and can create immediate effectiveness because the amount of capital in Vietnam's real estate is also many times lower than in China."
"Creating a bubble. We believe that in the next at least 5 to 10 years, the possibility of a bubble occurring is possible in small, localized groups in some areas that are not well controlled, but in the overall market, we believe it is difficult to occur."
As for art salesman Lu, he continues living with his parents in Ho Chi Minh City, also known as Saigon. He has postponed his dream of homeownership to the city. "For me, Saigon has a kind of intense love. It's called chaos. I like the chaos of Saigon, perhaps it can be called a bit crazy, perhaps it can be called a bit harsh, for those who find it difficult to survive, here people have to fight to survive in this land."