As the first quarter of 2025 approaches, a growing trend is emerging among real estate investors from Northern Vietnam, with many redirecting their attention to the Southern market. The shift comes in response to stagnation and diminishing rental yields in the North, prompting investors to seek more profitable opportunities in Ho Chi Minh City and its surrounding provinces.
Between 2020 and 2023, Northern cities such as Hanoi, Bac Ninh, Hai Phong, and Quang Ninh experienced significant price hikes, with high-profile developments like Vinhomes Ocean Park and Ciputra seeing substantial appreciation. However, by late 2024, this upward trajectory stalled, with property prices plateauing or even experiencing slight declines due to an oversupply of units and weak market liquidity.
This slowdown was particularly evident in large-scale projects situated in the western and eastern parts of Hanoi, where sales struggled, and investor confidence waned. High prices, combined with complex legal challenges, led to a reassessment of the local market’s potential. Furthermore, rental yields continued to fall behind the steep increases in property prices, reducing the attractiveness of the market for investors seeking returns.
In contrast, the Southern region of Vietnam is gaining momentum as a new hotspot for investment. The region is witnessing a rebound, fueled by economic recovery and growing development prospects. Southern cities, particularly Ho Chi Minh City, are seeing a surge in investment, with a wealth of new projects and expansion in housing and commercial infrastructure.
Notable developments like Vinhomes Grand Park, Gateway Thang Long, and VSIP Binh Duong are driving this change. These expansive projects are expected to add tens of thousands of residential units and attract long-term investment due to the promise of strong rental returns and long-term price growth. The real estate market in Ho Chi Minh City and its neighboring areas, including Bình Chánh, Nhà Bè, Hóc Môn, Long An, and Đồng Nai, remains highly appealing due to the substantial room for price increases, especially as industrial zones like VSIP II in Bình Dương attract a growing migrant workforce.
The shift in investor sentiment is becoming increasingly clear. Recent data shows that inquiries for real estate in Ho Chi Minh City from investors in Hanoi rose by 7% in the last quarter, while the number of Southern investors purchasing properties in the North dropped by 12%. This trend underscores the growing perception that Southern markets are more profitable, as housing costs in Ho Chi Minh City remain lower compared to Hanoi.
Surveys reveal that 66% of real estate investors from Hanoi are actively considering or already pursuing investments in the South, a stark contrast to the past when Northern markets were the dominant focus. This reflects a broader trend of Northern investors seeking favorable returns in the Southern real estate sector, which remains buoyed by economic growth, infrastructure improvements, and a strong demand for housing in areas near major industrial zones.
The interplay of infrastructure development, economic growth, and attractive investment opportunities is solidifying the Southern region’s status as a thriving market. With this strong wave of Northern investment, the real estate landscape in Southern Vietnam is rapidly evolving. As investors look to capitalize on the region’s growth potential, the Southern market appears poised for continued development and high returns in 2025 and beyond.
This shift is reshaping investment strategies, with many turning their attention southward in search of rewarding opportunities. While Northern markets once held the allure of high returns, they now appear to have reached their peak. As a result, Southern Vietnam is becoming the new frontier for real estate investment, offering fresh opportunities in an evolving market. The full impact of this transition will unfold in the coming months, but the current trend strongly suggests that the Southern region will be the focal point for future growth.
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