As 2024 draws to a close, Vietnam’s real estate market has shown signs of resilience and recovery, underpinned by favorable legal reforms, increased foreign direct investment (FDI), and strong growth in key sectors such as industrial real estate and high-end residential projects. This year has been transformative, with several critical trends shaping the landscape for the years to come.
1. Residential Market on the Recovery Track Amid Supply Imbalances
The housing market in Vietnam showed a marked improvement in 2024, particularly in Ho Chi Minh City (HCMC) and Hanoi, where new supply mainly consisted of high-end apartments.
In HCMC, prices for newly launched high-end apartments reached VND 72-142 million ($2,830-5,590) per square meter. The re-launch of previous projects also saw price hikes.
Hanoi witnessed similar trends, with primary prices rising 2-4% quarter-on-quarter in the final months of the year. Units priced at VND 70 million ($2,750) per square meter became increasingly common.
However, the mid-range segment continued to suffer from limited supply. Affordable apartments, priced below VND 38 million ($1,500) per square meter, were virtually absent, posing a challenge for homebuyers seeking affordable options. This price escalation has led to liquidity risks and a widening gap between market offerings and what buyers can afford.
There is, however, a glimmer of hope for a more balanced market in the future. Affordable housing projects in suburban areas like Binh Chanh district (HCMC), Binh Duong, and Dong Nai province have started to emerge. Moreover, HCMC’s development of 11 transit-oriented development (TOD) zones and land auctions around metro stations offer fresh opportunities for residential development.
2. Industrial Real Estate: A Star Performer
The industrial real estate sector was Vietnam’s standout performer in 2024, with strong demand driven by FDI and the China+1 strategy. As manufacturers seek to diversify supply chains away from China, Vietnam remains a top contender for new investments.
Industrial land rents in key markets rose by 2-5% per quarter, reflecting the high demand and low vacancy rates.
Several new industrial park projects received licenses or broke ground across the country, signaling strong future growth in the sector.
Despite some global economic uncertainties, such as the potential impact of Donald Trump’s new policies, Vietnam’s strategic location and cost-effective labor market continue to make it an attractive manufacturing hub. The demand for logistics and industrial properties remains robust, positioning the country to capitalize on global supply chain shifts.
3. Strengthening Legal Frameworks: A Turning Point
2024 marked a pivotal year for Vietnam’s real estate legal landscape with the implementation of new laws that aim to improve market transparency, streamline transactions, and boost investor confidence.
Key regulatory changes include:
The 2024 Land Law, the 2023 Housing Law, and the 2023 Real Estate Business Law, which collectively make property transactions clearer, more transparent, and fairer.
Reforms also address land use rights, investment requirements, and property project transfers, creating a more predictable environment for developers and investors.
These changes have bolstered sentiment in the market, with businesses and investors praising the clearer legal framework, though there is a continued call for more detailed guidance on implementation.
4. Sustainability and ESG: The New Norm
Sustainability continues to be a growing trend in Vietnam’s real estate sector, with both commercial and industrial properties increasingly aiming for green certifications.
In Ho Chi Minh City and Hanoi, green office buildings have gained significant traction, expanding beyond the central business districts into new areas like District 4, District 7, and Thu Duc City.
In the industrial sector, green-certified facilities are becoming more common. Notable projects include Hitachi Energy’s transformer factory in Bac Ninh (LEED Gold), Mitsubishi Estate’s Logicross Hai Phong (EDGE Advanced), and Lego’s factory in Binh Duong (targeting LEED Platinum for the office space).
The ESG (Environmental, Social, and Governance) criteria are increasingly influencing investor decisions. Properties that are resilient to environmental risks, energy-efficient, and socially responsible are becoming more valuable, with higher demand from both investors and tenants.
5. Foreign Investment Remains Strong Despite Global Slowdown
Although global FDI has slowed in 2024, Vietnam has bucked the trend, especially in the real estate sector. Despite broader macroeconomic and geopolitical instability, Vietnam continues to attract significant foreign investments, particularly in real estate.
Registered FDI reached $31.38 billion by November 2024, a modest 1% growth compared to the previous year. However, realized FDI — money that has been injected into the economy — saw a more robust increase of 7.1% year-on-year.
The real estate sector experienced an 89.1% surge in registered FDI, reaching $5.63 billion by November 2024. This signals strong confidence in the country’s growth potential and the attractiveness of its real estate market, especially in industrial, logistics, and residential sectors.
The government’s commitment to improving the business environment, along with strong infrastructure and urbanization trends, continues to draw foreign investors despite global uncertainty.
Conclusion: Optimism for 2025 and Beyond
2024 has proven to be a transformative year for Vietnam’s real estate market, characterized by regulatory improvements, growth in industrial real estate, and a shift towards more sustainable practices. While challenges remain, such as affordability issues in the housing market, opportunities abound for investors in both residential and industrial sectors.
David Jackson, CEO of Avison Young Vietnam, sums up the year’s outlook: “With the legal reforms, strong foreign investment, and shifting market dynamics, there are ample reasons to remain optimistic about Vietnam’s real estate market. Now is the time to reignite capital flows and embrace the new growth cycle.”
Looking ahead to 2025, Vietnam’s real estate market is poised for continued growth, driven by rising demand, strategic investments, and a robust legal framework that lays the groundwork for long-term sustainability.
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