Vietnam’s real estate market saw evidence of recovery in the second quarter of this year, marked by a rise in newly-licensed projects and gradually stabilizing property prices; shifts that better align with genuine housing demand. Still, experts warn that sustained growth will require a broader set of coordinated solutions moving forward.

According to the Ministry of Construction (MoC)’s latest report on the market in the second quarter, strong directives from the government, the Prime Minister, and local authorities have helped cool prices in major cities, ending the sharp spikes seen as 2024 came to a close. The market is now on a steadier path, with expectations of stable supply, transaction volumes, and pricing in the months ahead.

Several key policy shifts have contributed to the positive outlook, including the transition from a three-tier to a two-tier local government model, which is expected to prompt changes in regional planning, transport infrastructure, and socio-economic development. The government is also planning to pilot State-run real estate and land use trading centers, while introducing new regulations aimed at clearing longstanding bottlenecks, especially for large-scale commercial and social housing projects.

Apartment prices at record high

The housing market gained momentum in the second quarter, with nationwide transactions reaching over 157,000; a 16.6 per cent increase from the previous quarter. Demand grew in different segments, with land plots seeing the sharpest rise, while apartment and individual house sales also improved slightly.

In Hanoi and Ho Chi Minh City, apartment prices remained relatively stable compared to the first quarter. However, both cities are now witnessing their highest price levels in nearly a decade. In Hanoi, the average selling price climbed to VND80 million ($3,075) per sq m, up more than 5 per cent quarter-on-quarter and over 30 per cent year-on-year. The sharpest increases were seen at high-end developments in central districts, driven by limited supply and strong buyer interest.

Prices in Ho Chi Minh City, meanwhile, averaged VND89 million ($3,425) per sq m, changing little since the first quarter but representing a significant 36 per cent rise over the past year. The secondary market also recorded substantial gains, particularly in areas with completed infrastructure or recently handed-over projects. Developers are facing rising input costs, slow legal procedures, and limited land availability, all of which are fueling upwards pressure on prices.

Luxury and high-end projects continue to set new pricing benchmarks in areas benefiting from improved connectivity, such as metro lines, major Ring Roads, and arterial infrastructure expansions in Thu Thiem, Thao Dien, and surrounding neighborhoods.

For landed properties, including villas and townhouses, prices edged up modestly in both cities. In Hanoi, gated communities in Nam Tu Liem, Thanh Xuan, and Ha Dong recorded steady gains, while in Ho Chi Minh City villa prices rose in areas like District 9 (now Thu Duc city), Binh Chanh, and District 7 (now Tan Thuan ward), reflecting growing interest in low-density, high-end living spaces.

Land fever cools

In the land plot segment, the MoC reported signs of localized “fever” at the end of the first quarter in cities and provinces such as Hai Phong, Bac Ninh, Phu Tho, Ninh Binh, Hung Yen, and Dong Nai. Prices surged sharply in response to news about upcoming city and provincial mergers and administrative restructuring. However, most transactions during this period were speculative in nature.

In response, local authorities issued warnings to residents and ramped up market supervision, helping stabilize the situation. As a result, land prices have come under control, with asking prices rising only slightly, by around 3-5 per cent.

By the second quarter, land lots in various areas in Hanoi, Ho Chi Minh City, Da Nang, Hai Phong, and Binh Duong (now part of Ho Chi Minh City) showed mixed pricing trends. In Hanoi and Ho Chi Minh City, land prices remained elevated in certain prime zones, with some listings reaching up to VND165 million ($6,345) per sq m. In Da Nang and Hai Phong, prices were generally lower but still reflected growing interest. Meanwhile, Binh Duong saw a wide price range across different urban developments, from more affordable offerings to higher-end projects.

Intensifying regulatory reforms

The MoC has announced a series of measures to support the sustainable development of the real estate market, aligned with the government resolution to streamline administrative procedures and transition to a two-tier local government model. In line with Resolution No. 66, dated March 26, 2025, on the reduction and simplification of administrative procedures and business conditions, the Ministry is reviewing and revising legal frameworks related to planning, construction, land, housing, and real estate business operations to better reflect market realities.

It is also pushing local authorities to actively review and address obstacles in real estate project implementation, working closely with the Ministry of Finance (MoF) within the Steering Committee on resolving difficulties and problems of backlogged projects (Steering Committee 751), under Decision No. 751/QD-TTg dated April 11, 2025, from the Prime Minister, to resolve long-delayed projects and accelerate the development of social housing. A mid-year review conference on social housing was recently convened to assess progress and set tasks for the second half of the year.

Efforts are also underway to speed up land planning and allocation, especially in urban areas and industrial parks, and to draft a new decree on the establishment of a National Housing Fund. A pilot model for a “State-Managed Real Estate and Land Use Rights Transaction Center” is being finalized for submission to the government. Additionally, the MoC is enhancing its real estate information system to provide live, clean, and connected data linked with the population, land, and digital transformation systems, including those under the Ministry of Public Security and Ministry of Agriculture and Environment (MAE).

The MoC has called on ministries, sectors, and localities to continue advancing social housing initiatives, resolve legal hurdles in stagnant real estate projects, and strictly regulate land auctions and administrative restructuring.

Specifically, the MAE has been tasked with reviewing the Land Law, resolving land valuation bottlenecks, and curbing speculative manipulation in land auctions. It must also coordinate with provincial authorities to tighten supervision of land use planning, compensation, land pricing, and auctions to ensure land is available for social and worker housing projects.

The MoF is expected to propose tax policies on unused real estate, capital gains from land use conversions, and speculative transactions. It is also responsible for identifying and classifying legal and financial difficulties in real estate projects and reporting back to Steering Committee 751 for resolution. Additionally, it will collaborate with the MoC and relevant agencies to promote digital transformation and integrate procedures related to real estate transactions, notarization, tax, and land registry onto digital platforms.

The State Bank of Vietnam (SBV), meanwhile, has been urged to accelerate the disbursement of the VND120 trillion ($4.62 billion) preferential credit package for social housing and to explore mid-term credit solutions with stable interest rates for affordable commercial housing. It is also being asked to streamline lending conditions for individuals and businesses, and to study a separate housing credit package for young buyers. Commercial banks are expected to classify real estate projects and offer tailored solutions, such as loan restructuring or repayment deferrals, in compliance with financial regulations to safeguard banking system stability.

Cities and provinces are requested to disseminate relevant laws and policies, publish timely and transparent information on housing and land use, and disclose eligible real estate for transactions. Localities must also fast-track urban planning, especially for Transit-Oriented Developments (TOD), and ensure fair and transparent procedures in land auctions, project approvals, and land use conversions.

Lastly, authorities are urged to step up inspections to prevent and sanction legal violations in the real estate sector. This includes tightening oversight of property developers, brokerages, and land auctions, particularly in cases where price hikes appear speculative or unjustified. Localities are expected to work with the MoC to build a national real estate database and draft policies for resort and industrial real estate development.