Vietnam's Housing Market on the Brink: Unaffordability and Speculation Reach a Critical Point

Strategic Insights -

Vietnam's housing market has been on a tear, with prices soaring to unprecedented heights in recent years. According to World Bank data, apartment prices in downtown HCM City and Ha Nai are now 20-30 times higher than the average annual income of a skilled worker, a ratio three times higher than Thailand's and nearly four times higher than South Korea's during comparable stages of development. This has led to a situation where home ownership, once considered a basic right, has become unaffordable to a majority of residents.

Key Takeaways:

  • The Vietnamese housing market has witnessed one of the strongest real estate price increases in Southeast Asia, with apartment prices in downtown HCM City and Ha Nai now 20-30 times higher than the average annual income of a skilled worker.
  • The credit system in Vietnam is imbalanced, with real estate-related credit accounting for 21-25% of the total outstanding loans, with a likely figure exceeding 30% if consumer loans, corporate bonds, and home-mortgage collateral are included.
  • Taxation in Vietnam is also a major issue, with property tax accounting for just 0.03% of GDP, and no progressive taxes or levies on vacant properties, unlike countries like Singapore, South Korea, and China.
  • The lack of a housing rental market in Vietnam means that most people view owning a home as the only way to stability and prosperity, keeping demand for home purchases consistently high.
  • The government should introduce annual and progressive property taxation, and differentiate credit by purpose, with preferential loans reserved for first homes, social housing, or urban workers.
  • A comprehensive and coordinated set of measures addressing both supply and demand, as well as market management, is needed to cool off the housing market.

Statistics:

  • The average selling price of commercial apartments in Ho Chi Minh City in the third quarter of 2025 reached VNA78 million (US$2,900) per square meter.
  • New projects have seen their prices jump by more than VNA1 billion per unit within just a short period of time, with some projects priced at hundreds of millions of VND per square meter.
  • The urban population in Vietnam rose from 34.4% in 2019 to 44.3% in 2024, with an annual migration flow of roughly one million people from rural to urban areas.

Sources:

  • World Bank, "Real Estate Prices in Southeast Asia", 2023
  • Vietnam News, interview with Pham Thuan, deputy director of the Vietnam Association of Real Estate Brokers' Institute of Research and Evaluation
  • Vietnam News, interview with Assoc. Prof. Tran Duc Anh, lecturer at the University of Economics HCM City
  • Vietnam News, interview with Mia n, deputy director of the Vietnam Association of Real Estate Brokers' Institute of Research and Evaluation