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| Real estate: An auctioned land plot in Thanh Oai district, Hanoi . (Source: Vietnamnet) |
What to invest in the new era of the market?
In the vibrant flow of the market, 2024 marks solid progress, creating the premise for Vietnamese real estate to confidently enter a new era. With a complete legal corridor, transparent information and constantly increasing demand, the market is creating promising milestones in the coming time.
According to Dr. Nguyen Van Dinh, Vice President of the Vietnam Real Estate Association and President of the Vietnam Real Estate Brokers Association, the Vietnamese real estate market in 2024 has overcome the most difficult period, recording many positive signs of recovery. With support from macroeconomic factors, effective management policies and increasing market demand, Vietnam's real estate continues to maintain the recovery process, opening up room for strong growth in the future.
The bright spot in the market picture is the return of a large number of brokers and trading floors, along with a sharp increase in housing supply. In 2024, the entire market recorded nearly 81,000 products for sale, an increase of more than 40% over the previous year, of which 47,000 were successful transactions with an impressive absorption rate of 72%. Notably, more than 50% of primary transactions came from investment demand.
The market forecast report of the Vietnam Association of Realtors (VARS) shows that the "heat of the real estate market" in 2025 will gradually spread more evenly among regions; in which, the Northern region continues to be hot, the Southern region shows clear signs of increasing heat. In particular, the villa/townhouse type is gradually becoming the "focus" of the market. The tourism and resort real estate segment has more positive signals, especially the condotel product (resort tourism apartment) when there are projects in operation that have been granted certificates.
The industrial real estate segment has received many positive signals from the economic recovery, as well as opportunities opened up by many "giants" in the world with the decision to choose Vietnam as a "docking place".
This remarkable growth not only “heats up” traditional real estate areas but also promotes the development trend of potential models, notably wellness living real estate. This segment brings living and resort values, where physical and mental health are perfectly balanced. The model integrates amenities such as meditation, yoga, onsen, massage, and fresh green spaces,...
According to Forbes, this market is valued at $438.3 billion in 2023 and is expected to reach $2,034.1 billion in 2034, with a compound annual growth rate (CAGR) of 14.8%.
Bright spot of industrial real estate
Industrial real estate will continue to be a bright spot in the market in 2025, attracting foreign investment and leading in the number of transactions. This segment is associated with high rental demand and stable supply growth from many industrial park projects approved and implemented nationwide. Rental prices will continue to increase in key markets, accompanied by high occupancy rates.
The main driving force of industrial real estate comes from foreign direct investment (FDI) flows into manufacturing industries, especially the trend of diversifying supply chains and shifting production out of China. Market confidence of FDI enterprises is reinforced by the total FDI capital implemented in Vietnam in the first 11 months of 2024, estimated at 21.68 billion USD, up 7.1% over the same period last year, reaching a new record in the period 2019-2024. This is also the third consecutive year that Vietnam has achieved FDI disbursement of over 20 billion USD.
According to a survey by JETRO (Japan), in 2024-2025, more than 60% of Japanese companies in Vietnam plan to expand their business in Vietnam, considering it the most attractive business development destination in ASEAN. In addition, Google plans to open an office in Vietnam in April 2025 and Nvidia opens an R&D center to develop artificial intelligence applications in Vietnam.
Therefore, the industrial real estate market will be a bright spot, opening up great investment opportunities and high profit potential for real estate investment to meet the housing needs of workers, support service areas and commerce in these areas.
Average apartment prices in 4 central districts of Hanoi have doubled
According to Chairman of the Vietnam Real Estate Brokers Association Nguyen Van Dinh, in 2024, the supply of apartments in Hanoi will begin to grow again, but will be concentrated mainly in suburban areas far from the center, accounting for more than 90%.
The supply of apartments in the central area including Hoan Kiem, Ba Dinh, Dong Da and Hai Ba Trung districts is still very scarce. Preliminary data for 2024 shows that the central area will only record about 400 products for sale, with 3 new projects for sale, only about 30% of 2023.
The supply of apartments in the core districts of Hanoi has always remained low and is increasingly scarce, due to the increasingly depleted land fund for project development and strict regulations on height and construction density, causing the supply to be increasingly scarce.
In particular, real estate prices in central areas are on an upward trend with large demand from economic and urban development.
The average price of apartments in four central districts of Hanoi has doubled since the beginning of 2019, 30% higher than the average increase in Hanoi as a whole. Among them, Hai Ba Trung and Dong Da districts have had the best price increase in the past 5 years.
New projects opened for sale in the past 3 years have also continuously had their prices adjusted upward, about 10% after each opening phase.
In 2024 alone, new luxury apartment projects in the central area will be opened for sale with common prices starting from VND125 million/m2. Serviced apartments will cost about VND88 million/m2 (excluding VAT and maintenance fees), Mr. Dinh cited.
At the same time, apartment rental prices increased rapidly, higher than the general increase of the whole market due to both the general trend and scarcity, estimated to increase by about 15% over the same period.
The preliminary absorption rate of new supply in 2024 is estimated at 50%. The occupancy rate of rental apartments is always above 80% and is on a steady upward trend.
In the long term, the supply of apartments in the central area can be supplemented by new apartment projects with only a small chance of being developed through policies on renovating old apartments and collective houses.
Meanwhile, the demand of the real estate market will continue to grow, especially the demand for high-end housing from the middle and upper classes, which is constantly expanding along with economic development and from the team of experts following the FDI wave.
Auctioned land in Hanoi's suburbs has fallen sharply
At the end of 2024, 26 plots of land (LK2, LK6) in DG31/2019 area, Yen Quan village, Tan Phu commune, Quoc Oai district were successfully auctioned . With a starting price of 4.7 million VND/m2, the auction ended with the highest winning price of 76.7 million VND/m2 (16 times higher than the starting price) and the lowest of 40.7 million VND/m2 (8.7 times higher than the starting price).
Compared to the most recent land auction also in the DG31/2019 area of Yen Quan village, Tan Phu commune at the end of November 2024, this auction has decreased sharply, when the land lot with the highest winning price decreased by 18 million VND, or about 20%.
Specifically, the previous auction of 20 plots recorded the highest winning price of nearly 95 million VND/m2, the lowest of nearly 71 million VND/m2.
In August and September 2024, many auctions in districts on the outskirts of Hanoi attracted hundreds of participants, with some sessions even having over 1,000 registrations. Land auctions on the outskirts of Hanoi became a "hot spot" with winning prices continuously "reaching peaks", with many plots of land costing over 100 million VND/m2. However, the heat from the auctions was no longer maintained.
It is noted that land auctions in suburban districts of Hanoi are gradually showing signs of cooling down after many rectification actions from management agencies. The number of participants and registration dossiers for auctions has decreased significantly.
For example, in Phuc Tho district, in November, the auction of 12 land plots in Doc Tranh area (Trach My Loc commune), Huong Nam area (Xuan Dinh commune), and Cong Cho area (Tich Giang commune) had more than 120 applications with 32 customers registering to participate. Compared to the auction in August and September, the number of participants has decreased sharply.
At this auction, the land auction price also dropped sharply. Of which, 7 plots of land in Doc Tranh area were all successfully sold, but the highest winning price was 37.6 million VND/m2. The lowest winning price in this area was 28.8 million VND/m2, only about 20% higher than the starting price.
Meanwhile, also at Doc Tranh land, previous auctions continuously "reached new peaks" with the highest winning price each session higher than the previous session, from 60 to 69.8 and then 75 million VND/m2 at the auction in mid-September.
At the land auction “hotspot” in Hoai Duc, Thanh Oai also cut the “fever” when a series of deposit cancellations appeared. In the auction in November 2024 in Thanh Oai district, the highest winning price was recorded at 75 million VND/m2, down 20% compared to the auction the previous week in the same area. Compared to the record auction that recorded more than 100 VND/m2 in August, this price decreased by about 35%.
In early December 2024, the Prime Minister continued to remind ministries and localities to rectify land auctions after several sessions showed signs of price inflation, disrupting the market. Many localities also had to temporarily suspend land auctions in the last months of the year to review legal issues.
Real estate legal expert Nguyen Van Dinh said that adjusting the land price list will create an "escape door" for land use rights auctions.
Looking at reality, Mr. Dinh assessed that recently, in Hanoi as well as some localities, there were many cases where auction participants were willing to pay high prices regardless, accepting to lose the deposit. Because, according to Article 159 of the 2024 Land Law, the starting price for land auctions is calculated according to the land price list.
Meanwhile, the land price list of Hanoi (before December 20, 2024) and many localities is too low, leading to very low starting prices, and the deposit calculated at 20% of the starting price is also very low, creating great attraction to attract many participants.
For example, the auction in Soc Son district caused a stir in public opinion when the bid was up to 30 billion VND/m2 with a starting price of only 2-3 million VND/m2. Some people were willing to "compete", pay high prices with the mentality of "at most they will lose the deposit", creating "competition" in bidding and causing frustration, wanting to disrupt the auction.
“The Ministry of Natural Resources and Environment has issued a document urging and directing localities to promptly review and adjust and update land price lists to ensure market principles. In fact, many localities, including Ho Chi Minh City and Hanoi, have announced adjusted land price lists with increases many times higher than the old land price lists. When the starting price in land auctions is brought closer to the market price and the deposit increases accordingly, people will have to consider carefully before participating in the auction. Auctions will become more professional and healthy, instead of the chaotic situation as in the recent past,” said Mr. Dinh.
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