Data from the Market Research and Customer Insights Center at the One Mount Group shows that the first half of 2025 saw an increase in apartment supply across both Hanoi and Ho Chi Minh City, with new launches largely concentrated in the high-end and luxury segments. Sales activity remained strong, reflecting a consistently high level of housing demand, particularly for apartments.

A One Mount Group representative predicted that if demand holds steady in the second half of the year then prices in both cities would likely continue to rise. Notably, Hanoi is rapidly closing the price gap with Ho Chi Minh City, signaling a potential shift in market dynamics.

Reshaping pricing dynamics

Hanoi’s average primary apartment price stood at around VND80 million ($3,075) per sq m in the second quarter of this year, up 5.6 per cent from the previous quarter and 24 per cent year-on-year. In Ho Chi Minh City, prices held steady at VND89 million ($3,425) per sq m, flat from the first quarter but 15 per cent higher than in the same period of 2024. The price gap between the two cities narrowed from nearly VND20 million ($770) per sq m in early 2024 to about VND9 million ($345) by mid-2025, according to the One Mount Group.

The faster price increase in Hanoi is mainly due to its supply structure. New launches in the second quarter were concentrated in the high-end and luxury segments, including four large-scale luxury projects priced above VND80 million ($3,075) per sq m (excluding VAT and maintenance costs), pushing the average upwards. No mid-range projects were introduced, and apartments priced under VND65 million ($2,500) per sq m were only found in the capital’s eastern suburbs, like Van Giang, or in neighboring provinces such as Hung Yen. In contrast, Ho Chi Minh City had more diversified supply, with one mid-range project making up 42 per cent of new stock, helping stabilize overall prices.

Mr. Tran Minh Tien, Director of the Market Research and Customer Insights Center at the One Mount Group, noted that if demand holds, average prices in Ho Chi Minh City could reach VND100 million ($3,845) per sq m by year-end, driven by incoming luxury supply.

Reflecting similar trends, recently-released figures from the Vietnam Association of Realtors (VARS) show that over 36,000 new housing units were introduced in the second quarter, or more than 2.5-times the number in the first quarter and 90 per cent higher year-on-year. In the first half of 2025, total supply reached 64,000 units, including over 51,000 new launches. This growth reflects improved legal conditions and a clearer recovery trend, especially in the southern market.

However, supply remains imbalanced in major cities like Hanoi, Ho Chi Minh City, and Da Nang in the central region, with most new stock in the high-end and luxury segments. Apartments priced at under VND60 million ($2,310) per sq m are rare, and price declines are unlikely.

Mr. Le Dinh Chung, a member of the VARS Market Research Task Force, pointed out several factors contributing to persistently rising housing prices. Supply, though improving, still lags behind demand and remains concentrated in the high-end segment, driven largely by major developers who accounted for more than 72 per cent of new housing supply in the second quarter.

Meanwhile, Mr. Nguyen Chi Thanh, Vice Chairman of VARS, warned that rising prices are reducing access to housing for lower- and middle-income groups. It also poses risks to public administration: using inflated transaction prices as a basis for land valuation could distort the market, affect compensation, taxation, and public revenue, and raise the risk of a market bubble.

The shift to market-based land pricing is expected to improve transparency and accelerate compensation procedures, Mr. Thanh noted. However, sudden price hikes in some cities and provinces and a lack of nuanced pricing based on land usage have caused concern. Higher land values also mean heavier taxes and fees, burdening both individuals and businesses, especially in suburban or economically weaker areas where abrupt implementation has triggered widespread shock.

Suburban appeal grows

Transaction volumes saw strong momentum from late in the first quarter to mid-May, according to VARS. Activity has started to ease in some areas, however, as temporary demand was met and buyers adopted a cautious stance, anticipating possible mergers and land price changes.

Investor focus is shifting from speculation to long-term value. Many are now targeting satellite cities with more reasonable prices, growing infrastructure, and better transport links. Young homebuyers, often priced out of central areas, are willing to move farther from the city if projects offer good amenities, reputable developers, and a quality living environment.

A BHS Group survey shows that rising apartment prices in major cities are pushing buyers towards smaller cities and provinces. Locations such as Hai Phong, Bac Giang (now Bac Ninh), Hung Yen, Nghe An, and Binh Duong (now part of Ho Chi Minh City) are attracting more attention. Meanwhile, emerging markets like Ha Nam (now Nam Dinh), Phu Tho, Thanh Hoa, and Dong Nai offer more competitive pricing, starting from VND20 million ($770) per sq m, aligning better with the needs of young and middle-income families.

BHS has forecast that nearly 88,600 new apartments will enter the market in the second half of this year, primarily in Hanoi and Ho Chi Minh City. Most new supply will again come from the high-end and luxury segments, encouraging most buyers to look further afield. Primary prices are likely to stay high due to the continuation of existing projects, and developers are investing heavily in surrounding infrastructure to further enhance appeal.

Meanwhile, VARS noted that the closing months of 2025 will benefit from improved supply as land use rights and pricing approvals progress. The southern region may gain momentum if projects launch as scheduled. Supply will remain polarized by developer scale and reputation, though more large players are returning to the market.

Despite growing supply, price and demand misalignment persists. New units remain expensive due to higher land use fees and infrastructure investment. In big cities, this limits accessibility and slows absorption. Demand, fueled by urbanization and income growth, is increasingly shifting towards outlying areas where price and infrastructure are more balanced.

Liquidity remains strong in the secondary market across key urban zones and infrastructure-driven cities and provinces. Peripheral and satellite cities and provinces near Hanoi and Ho Chi Minh City are experiencing higher transaction volumes.

Apartments remain the most active segment in both supply and transactions. Land plots and standalone homes in well-connected cities and provinces with strong economic growth are increasingly attractive to investors. Affordable housing is showing early recovery signs as the government addresses legal and planning challenges.

Primary apartment prices continue to rise, fueled by high land use fees and a shift to luxury offerings. Secondary prices are improving in areas near newer, more expensive developments. Land plots in well-located, legally sound areas are stable with positive price trends, and villas and townhouses are also becoming more expensive due to limited supply and rising development costs.

Given the sustained upwards trend in already-high housing prices, VARS has recommended that State authorities implement six key measures:

First, complete the post-merger restructuring of administration bodies and effectively implement the revised Land Law, Law on Housing, and Law on Real Estate Business, along with related tasks and solutions, to ensure uninterrupted real estate transactions and business operations.

Second, effectively enforce new regulations on decentralizing land-use approval authority between the two local government tiers, aiming to reduce administrative delays for project developers and expedite market supply.

Third, urgently complete the National Real Estate Database and promote the launch of State-managed real estate transaction centers to increase market transparency.

Fourth, accelerate progress on key transport infrastructure projects such as Ring Roads, metro lines, and expressways to expand urban space and provide more housing options at reasonable prices.

Fifth, study mechanisms and policies to channel capital into residential real estate segments aligned with the actual needs of the majority, to mitigate financial risks and ensure effective capital allocation.

And sixth, tighten control over the capital mobilization activities of real estate businesses in stock and bond markets, especially those with large issuance volumes, high interest rates, poor financial health, or unbacked bonds.