Vietnam’s real estate sector, especially the land-based housing segment, continues to experience substantial price increases despite a noticeable slowdown in transactions, illustrating the complex dynamics currently shaping the market.
Recent data from Savills Vietnam highlights a dramatic rise in property prices, particularly in Ho Chi Minh City, where the average price for land-based homes has surged to approximately 330 million VND per square meter. This marks a 20% increase from the previous quarter and a threefold rise since 2020. However, this surge in prices has had its challenges, particularly in the luxury segment. Giang Huỳnh, Director of Research at Savills, points out that properties priced above 30 billion VND have seen a significant reduction in successful transactions, with only 60 sales recorded in the last quarter.
The persistent rise in property prices is placing a strain on the market’s ability to absorb new inventory. Despite the price hikes, transaction volumes have declined, indicating buyer hesitation in a market that continues to escalate in cost. According to JLL, the average price for newly sold villas and townhouses in the fourth quarter reached approximately 430 million VND per square meter, reflecting an 11% increase from the previous year. This escalation is further dampening market sentiment, particularly as many properties now exceed the one-million-dollar mark.
Buyer caution has been amplified by fluctuating interest rates and rising prices, leading to a slowdown in demand for secondary market properties. As a result, the number of new properties sold has fallen drastically, with only 58 transactions recorded in the latest quarter—a 50% drop compared to the previous period.
Despite these challenges, the luxury housing sector remains a bright spot. Cushman & Wakefield reports significant demand for low-rise properties, which have seen an average price increase of 41% over the past year, now averaging 480 million VND per square meter. This growth is largely driven by several high-value developments in Ho Chi Minh City, particularly in affluent districts such as Thủ Thiêm and Thủ Đức. These areas have seen property values hold steady, reinforcing the luxury market’s resilience.
The government’s efforts to accelerate infrastructure projects and address regulatory challenges provide hope for market revitalization. With 22 plans currently under review for simplification, stakeholders are optimistic that these changes will ease the regulatory burden on developers and investors. The government is also considering measures to support first-time homebuyers, with HoREA calling for easier access to credit for individuals aged 18 to 45.
Despite rising prices, investor sentiment remains cautious. Market trends indicate that while prices continue to climb, purchasing power is on the decline, creating a paradox for potential buyers. An unnamed analyst commented, “While purchasing power has dwindled, primary prices have continually risen, now nearing 200 million VND per square meter,” highlighting the disconnect between growing costs and diminishing affordability.
Looking ahead to 2025, forecasts suggest that approximately 2,000 new properties will enter the market. Optimism is building around future infrastructure developments, which are expected to drive activity and increase investor confidence. Giang Huỳnh predicts that the high-end market will continue to dominate, driven by limited land availability and escalating costs, providing a foundation for future growth across various segments.
In conclusion, Vietnam’s real estate market in 2024 presents a complex landscape characterized by significant price increases, slow transaction volumes, and cautious buyer sentiment. As stakeholders await the impact of infrastructure improvements and regulatory reforms, the market remains poised for potential recovery, with expectations for growth in the coming years.
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