Ho Chi Minh City, June 18, 2025 – Vietnam’s housing market, while facing short-term headwinds from potential U.S. tariffs, continues to demonstrate strong underlying momentum, supported by robust economic fundamentals, rising middle-class demand, and sustained investor confidence.
In the first quarter of 2025, Vietnam’s real estate sector saw dynamic activity. Major developers such as Vinhomesreported outstanding sales performance. Within just four days of its March launch, 90% of the first-phase units at Vinhomes Wonder City, a premium low-rise residential development on the western edge of Hanoi, were sold. Priced at under half the cost of similar offerings in central Hanoi, the project attracted intense market interest, driving both rental prices and investor speculation in the surrounding area.
Market enthusiasm was also reflected in the company’s share price, which surged over 13% between March and mid-April, bucking the broader Ho Chi Minh City stock market trend, which declined by nearly 8% during the same period.
However, the announcement by U.S. President Donald Trump in early April of a new 46% tariff on Vietnamese exports—later revised to a temporary 10% blanket tariff—introduced a layer of uncertainty to the broader economic outlook, including the property sector. With Vietnam’s economy heavily reliant on U.S. trade—nearly 30% of exports are U.S.-bound—the housing market has entered a “wait-and-see” phase, according to analysts.
Long-Term Fundamentals Remain Strong
Despite near-term caution, market experts agree that Vietnam’s real estate outlook remains fundamentally sound. In 2024, the country posted GDP growth exceeding 7%, the highest in Southeast Asia. The World Bank recently raised its 2025 growth forecast for Vietnam to 6.8%, citing strong economic momentum and advising the country to leverage fiscal space to prepare for external uncertainties.
In Hanoi, new condo supply tripled in 2024 to nearly 40,000 units, with sales reaching over 70% and prices rising by 24% year-on-year, according to CBRE. The positive trend continued into 2025, with Savills reporting a 5% quarter-on-quarter increase in the first quarter.
In contrast, Ho Chi Minh City experienced a drop in new residential launches, and sales of landed properties fell 50%compared to 2023. Yet, infrastructure projects such as the completion of the city’s first metro line are expected to revive demand. Market activity in Q1 was dampened by the Lunar New Year holiday but still outpaced the same quarter last year.
“Right now, it’s a cautious environment,” said Alex Crane, Managing Director at Knight Frank Vietnam. “Large deals are being reassessed, capital expenditures are on hold, and all assumptions are under review—especially with tariff negotiations still underway between the U.S. and Vietnamese governments.”
Structural Drivers and Wealth Expansion Fuel Growth
Vietnam’s property market remains underpinned by structural advantages: a young, growing population of over 100 million, increasing urbanization, and a fast-expanding middle class—now accounting for around 30 million people, or 30% of the population.
Rising housing prices, however, have sparked concerns over affordability. According to the Ministry of Construction, average apartment prices in Hanoi rose 58% in 2023 alone. Savills warned that affordable housing is becoming increasingly inaccessible, with secondary cities now being viewed as a potential solution for mid-income buyers.
While affordability is a pressing issue, another notable trend is the growth of Vietnam’s ultra-high-net-worth population. Between 2023 and 2028, the number of individuals with over USD 30 million in investible assets is expected to rise by 30%, the fastest rate in mainland Southeast Asia outside Malaysia. By 2028, Vietnam is projected to host nearly 1,000 individuals in this wealth bracket, fueling demand for ultra-luxury residences.
Projects like JW Marriott’s Grand Marina Saigon, which launched its second 46-storey tower in February with unit prices starting at USD 14,000 per square meter, are setting new benchmarks for Vietnam’s luxury property market.
Outlook: Risks Acknowledged, Resilience Expected
Analysts acknowledge that trade uncertainty and a fragile global environment may disrupt short-term investment confidence. Potential impacts on supply chains, leasing volume forecasts, and lending policy remain closely watched. However, a weakening U.S. dollar, lower borrowing costs, and declining interest rates are expected to cushion the effects.
“Vietnam entered 2025 with remarkable momentum,” said Matthew Powell, Director of Savills Hanoi. “While tariffs present a real risk, the housing sector remains anchored by long-term fundamentals. If macro conditions remain relatively stable, the market may bend—but is unlikely to break.”
With Vietnam aiming to achieve upper-middle-income status—defined by the World Bank as per capita income above USD 4,515—before the end of the decade, the property sector is poised to benefit from deeper capital formation, infrastructure upgrades, and sustained urban migration.
For now, Vietnam’s real estate market stands at a crossroads, balancing immediate geopolitical uncertainties with promising long-term growth potential.
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Source: Vietnam Insider