Phase 2025-2030: Forecast and Scenario Analysis for Vietnam's Real Estate Market

Vietnam's real estate market is entering a significant transitional phase, with the enactment and enforcement of several new laws such as the Land Law, Housing Law, and Real Estate Business Law. These changes have established a solid legal foundation, setting the stage for a new development cycle from 2025 to 2030. However, the market's recovery and sustainable growth will largely depend on policy synchronization, administrative reform, and the efficient mobilization of financial resources. Below are forecasts and potential scenarios for the coming years.

Foundations of Recovery and Remaining Challenges

Since the beginning of 2024, the market has witnessed the introduction of tens of thousands of new residential units. However, this number remains relatively limited, reaching only 10% of the peak development period in 2018-2019. Despite some signs of recovery brought about by policy changes, the current supply is still insufficient to meet demand, particularly in the affordable housing segment.

Experts believe that Vietnam's real estate market still faces several significant challenges. It is essential to accelerate the improvement of procedures related to planning and land use to achieve synchronization. Furthermore, developing financial instruments such as a mortgage system, mutual savings funds, and real estate investment trusts is crucial to provide a sustainable financial basis for the market's stable development.

Market Cycles and Scenarios for 2025-2030

Associate Professor - Dr. Tran Kim Chung, former Deputy Director of the Central Institute for Economic Management, noted that since 1986, Vietnam's real estate market has experienced multiple cycles of ups and downs, often closely linked to changes in the legal framework. For example, the recovery phase from 2013-2014 benefited from Resolution 02/NQ-CP, while the explosive growth of condotels and officetels from 2015-2018 reflected the direct influence of legal policies on market dynamics.

For the 2025-2030 period, Tran Kim Chung forecasts three main scenarios that could unfold:

1. Neutral Scenario: The market develops evenly across all segments without extreme fluctuations. This is the most likely scenario due to the participation of both domestic and international investors, along with synchronized financial and legal policies, creating a favorable environment for growth.

2. Adverse Scenario: Some real estate segments may enter a downturn due to unfavorable macroeconomic factors such as high inflation, difficulty accessing credit, and slow project approval processes. Although the likelihood of this scenario is low, it remains a potential threat that requires attention.

3. Positive Scenario: The market could experience a strong boom, particularly in high-end and emerging urban areas. However, the realization of this scenario depends on economic stability and the effective implementation of investment incentive policies.

Key Factors for Market Advancement

To achieve sustainable development in the real estate market for the upcoming phase, Vietnam needs to focus on three core factors. Firstly, it is necessary to perfect and synchronize the legal system related to land, housing, and real estate business to enhance investor confidence and promote transaction growth.

Secondly, diversified financial mobilization is needed, encompassing both traditional resources and new financial instruments such as a mortgage system, mutual savings funds, and real estate investment trusts. These instruments are essential components for supporting the development of large-scale real estate projects, thereby creating a sustainable financial foundation for the market.

Lastly, administrative procedures, particularly those related to planning and land allocation, must be improved. Land allocation through bidding and land-use conversion should be accompanied by detailed, clear planning and strategies to ensure rapid and efficient project implementation.

Conclusion

Vietnam's real estate market from 2025 to 2030 holds significant development potential, but also faces numerous challenges that need to be overcome. Improving the legal framework, streamlining administrative processes, and developing new financial instruments will be key to moving the market towards sustainable and stable growth. Adjustments and strategic decisions made today will lay a solid foundation for the future growth of the real estate market.