Vietnam Real Estate Market : From Turmoil to Steady Growth and Recovery
Vietnam's real estate market has shown promising signs of recovery and growth since late 2023. This resurgence can be attributed to government efforts to promote safe and sustainable development, along with positive changes in supply, prices, and transactions. According to the Vietnam Association of Realtors (VARS), the first quarter of 2024 saw an absorption rate of nearly 31% and around 6,200 successful transactions, marking a significant increase from the previous quarter and the same period last year.
Interest and transactions are growing across various types of real estate, including land plots, townhouses, villas, and apartments, in both primary and secondary markets. Key markets such as Haiphong, Hanoi, Ho Chi Minh City, Danang, and Binh Duong are seeing increased activity. Notable projects like Lumière Evergreen, The Sola Park, Cara Riverview, and The Beverly are attracting substantial interest and achieving strong sales, particularly in the mid-range and luxury segments.
Vietnam's real estate market is rapidly becoming a significant player in the Asia Pacific region, ranking as the second most preferred emerging market by CBRE's 2024 Asia-Pacific Investor Intentions Survey, trailing only behind India. This growth is driven by robust economic progress, increasing foreign direct investment (FDI), a growing middle class, and favorable demographics. Rapid urbanization and ongoing infrastructure development projects create significant investment opportunities across various sectors, including residential, commercial, and industrial real estate.
Source : Savills Research & Consultancy.
This data represents Vietnam real estate market, located in Ho Chi Minh City, performed well in Q3/2023 with rent reaching VND 771,000/m2/month
and occupancy staying high at 90%. Q3/2023 refers to Quarter 3 performance, 9M/2023 is year to date (YTD).
Political stability, investor-friendly policies, and Vietnam's strategic location within Southeast Asia enhance its connectivity to regional markets, promoting trade and investment opportunities. The revised Land Law, which expands land use rights for overseas Vietnamese, is expected to attract significant investment, aligning with the aspirations of the Vietnamese diaspora and mobilizing considerable investment resources.
Despite the challenges of 2023, marked by supply shortages and reduced investment demand, the market is anticipated to rebound strongly in 2024. Investment flows into Vietnam primarily come from Asian investors, including those from Singapore, Japan, Hong Kong (China), and the Republic of Korea. There is also growing interest from individual investors, including foreigners and overseas Vietnamese, with around 4 million people indicating a demand for buying houses in Vietnam.
Vietnam's real estate sector has garnered international acclaim, with local firms winning major awards at the 18th PropertyGuru Asia Property Awards Grand Final 2023. The government is implementing measures to ensure sustainable development and address housing affordability issues. While licensing issues have posed challenges, resulting in fewer new residential launches and increased selling prices, the government's efforts aim to tackle these challenges and leverage opportunities for continued growth in the real estate market.
Overall, Vietnam's real estate market is on a path of recovery and rising global significance, supported by strong economic fundamentals, strategic initiatives, and growing investor interest.
