VIETNAM’S REAL ESTATE MARKET: LIQUIDITY TIGHTENS, DEVELOPERS ADAPT
Vietnam’s real estate market is still fighting to regain investor and homebuyer confidence, with liquidity pressures showing little sign of easing. One key indicator: prepayments from homebuyers fell 6% in 2024 compared to the end of 2023, according to a report from VIS Rating. The decline reflects slower sales and weaker cash inflows, signaling that demand remains soft and developers continue to face funding challenges. Simply put, investor sentiment has yet to bounce back, and financial pressure on the sector is not letting up.
Part of the problem comes down to new rules on deposits and payments for off-plan properties. Starting August 1, 2024, Vietnam’s revised Real Estate Business Law will cap deposits at 5% of the sale price, replacing the previously unlimited structure. The move is expected to tighten developers’ cash flow, forcing many to rely more on external financing to keep projects moving. For an industry already grappling with weak demand and liquidity constraints, the shift adds another layer of complexity.
A WINDOW FOR FOREIGN CAPITAL IN THE FUNDING CRUNCH
Vietnam’s real estate market is also running into a funding crunch. In early 2025, a string of listed developers abruptly canceled or delayed planned share issuances, an unusual move that signals deep uncertainty. The bond market is not faring any better. February saw zero new corporate bond issuances, according to the Vietnam Bond Market Association—a historic standstill that lays bare mounting investor anxiety over macroeconomic risks.
At the heart of the problem is a looming wave of debt maturities, with real estate firms facing the biggest squeeze. VND192.3 trillion (USD7.6 billion) in corporate bonds come due in 2025, and more than 54% of that— VND 107.2 trillion (USD 4.2 billion)—belongs to property developers. With liquidity tight and investor confidence shaky, rolling over this debt is becoming a steep challenge. Equity markets are not offering much relief either. Investors have been quick to punish companies looking to raise fresh capital, fearing dilution and price pressure. Case in point: Dat Xanh Group (DXG) shares tumbled late last year after the company announced plans to issue over 150 million new shares.
VIETNAM’S REAL ESTATE MARKET IS AT A TURNING POINT
Soaring home prices are eroding buyer confidence and pushing Vietnam’s real estate market deeper into a slowdown. Affordability has hit a breaking point—on average, a Vietnamese household now needs 23.7 years of income to buy a home, according to the Vietnam Association of Realtors. That’s far above the global average of 14.6 years, underscoring how detached property prices have become from local earnings. With buyers increasingly priced out, many are stepping back, waiting for a correction.
As speculative buying slows and financing conditions tighten, genuine end-user demand is coming into sharper focus. A cooling market presents an entry point for savvy investors looking beyond short-term fluctuations and toward long-term value. For foreign buyers, this shift means less overheating, more rational pricing, and a clearer path to steady returns. Vietnam’s strong urbanization, rising middle class, and infrastructure boom continue to fuel demand, particularly in key rental markets like Hanoi and Ho Chi Minh City. As affordability challenges drive more people into the leasing market, well-managed rental properties stand to benefit.
HANOI’S INFRASTRUCTURE DRIVE SETS THE STAGE FOR LONG-TERM GROWTH
Hanoi is doubling down on infrastructure as it lays the groundwork for the city’s next phase of expansion. The newly approved 2025 land use plan puts transport at the center of development, with thousands of projects aimed at easing congestion, unlocking new economic zones, and fueling real estate growth. Some of the most ambitious projects are taking shape in Dong Anh, where the construction of Ring Road 4, Tu Lien Bridge, and Nhat Tan 2 Bridge is set to transform the district into a key urban hub. In Soc Son, efforts are focused on upgrading Provincial Road 131 and improving access to Noi Bai International Airport, reinforcing the area’s role as a gateway for trade and investment.
Meanwhile, Long Bien District is expanding Nguyen Van Cu Street and pushing forward with a new bridge to ease congestion on Chuong Duong Bridge, while Chuong My is advancing long-awaited improvements to National Highway 6. In the south, Thuong Tin is rolling out a series of transport upgrades to strengthen links with the capital’s core districts. In Nam Tu Liem District, rapid urbanization is driving a fresh wave of investment in road networks, particularly around key developments like Vinhomes Smart City. As Hanoi accelerates its infrastructure push, the city is laying the foundation for long-term economic and real estate expansion.
WHY THU DUC IS DRIVING HCMC’S PROPERTY BOOM AS ALL ROADS LEAD EAST
The numbers speak for themselves—Thu Duc City’s housing absorption rate has surged past 80% in 2024, cementing its status as Ho Chi Minh City’s hottest real estate market. The eastern corridor has long been the city’s infrastructure powerhouse, home to key transport arteries like Hanoi Highway (now Vo Nguyen Giap), Mai Chi Tho Boulevard, Pham Van Dong Street, and the HCMC – Long Thanh – Dau Giay Expressway. But the real game-changer arrived in late 2024: Metro Line 1 finally came online, a milestone that’s reshaping the area’s urban fabric and reinforcing its pull on both investors and homebuyers.
And the momentum is only building. Over the next two years, a wave of multi-billion-dollar infrastructure projects is set to further elevate the region. Ring Road 3, Long Thanh International Airport, the Ben Luc – Long Thanh Expressway, and the An Phu Interchange are all nearing completion, with the first phase of An Phu set to open by April 30 and full delivery expected by late 2025. These projects are unlocking cross-regional trade, supercharging connectivity and reinforcing Thu Duc City’s position as the city’s undisputed property hotspot.
WHY FOREIGN INVESTORS NEED MORE THAN JUST A GOOD LOCATION
Vietnam’s real estate market is evolving fast, and owning the right condo is just the first step—maximizing its value is where the real opportunity lies. With infrastructure upgrades transforming key districts in Hanoi and Ho Chi Minh City, demand for well-managed rental properties is rising, particularly among expatriates, corporate tenants, and high-income professionals looking for quality living spaces with reliable services.
But a prime location alone does not guarantee strong yields. Leasing and asset management have become essential tools for investors aiming to optimize returns and maintain long-term value. A well-structured approach—covering pricing strategy, tenant retention, maintenance and regulatory compliance—ensures high occupancy rates and steady rental income, even as supply in top districts grows. For investors who take a proactive approach, Vietnam’s rental market presents a compelling mix of strong demand, attractive yields and long-term capital appreciation. To learn further about the latest investment spotlights, residential leasing and asset management services by Arcadia Consulting Vietnam, reach us at rs@arcadia-consult.com.vn
