Creating Momentum for the Real Estate Market in 2025

The real estate market (BĐS) plays a core role in the macroeconomic system, reflecting not only the financial health of the country but also influencing various economic sectors. In 2025, Vietnam’s real estate market is expected to enter a new development cycle, driven by institutional reforms, the improvement of the legal framework, and government support policies aimed at removing obstacles and facilitating capital investment flows.

Enhancing the Legal Framework – A Growth Catalyst

According to the Vietnam Real Estate Association (VNREA), the GDP growth rate of the real estate sector in 2024 reached 3.34%, an improvement compared to 2023. The supply of commercial housing has shown clear signs of recovery, particularly in the condotel and land markets. The industrial zone (KCN) system has also expanded significantly, increasing from 397 zones in 2021 to 431 in 2025, reflecting the growing demand for production and logistics infrastructure. However, real estate enterprises still face numerous challenges, including a 1.5% decline in profit margins, a 3.2% increase in land acquisition costs and loan interest rates, leading to a 1.9% drop in stock prices.

Ms. Đỗ Thu Hằng, Senior Director of Research and Consulting at Savills Hanoi, believes that 2025 will mark the beginning of a new development cycle, in which the apartment market in Hanoi and Ho Chi Minh City remains a highlight. The improvement of the legal framework not only helps resolve stalled projects but also creates favorable conditions for mergers and acquisitions (M&A) in the sector. This will lead to increased supply, improved market liquidity, and ensured stability.

Additionally, supportive policies in credit, taxation, and loan mechanisms will continue to expand, making it easier for businesses and homebuyers to access capital. Particularly, the revised Land Law, expected to take effect in mid-2025, will directly impact land management, real estate valuation, and transactions, ensuring a more transparent and efficient market operation.

Addressing Barriers to Promote Market Development

According to Dr. Cấn Văn Lực, Chief Economist at BIDV, the current real estate market is leveraging growth drivers from institutional reforms and flexible monetary policies. However, several obstacles still need to be addressed:

• Rising Housing Prices: Current housing prices reflect an imbalance in supply and demand, mainly driven by increased land costs, construction materials, and interest rates.

• Cumbersome Administrative Procedures: Real estate project development requires businesses to obtain dozens of permits and approvals, delaying project progress.

• Regulatory Hesitation: Concerns about legal risks among regulatory bodies slow down the approval process for projects.

Dr. Lực emphasized that reducing housing prices requires enhanced transparency in land management, preventing the waste of public assets, and strictly controlling speculation and "price manipulation" in the real estate market. These measures will ensure the healthy functioning of the market and reduce the risk of real estate bubbles.

Another key issue is housing affordability for the general population. Statistical data indicates that with the current average apartment prices and household incomes, it takes approximately 23.7 years of savings to afford a home. Therefore, the government should increase policy support for social housing and worker housing to meet the needs of low- and middle-income groups.

Furthermore, local authorities need to take measures to control land speculation and prevent housing prices from being irrationally inflated beyond their real value. If property prices in a region increase by more than 20% within a short period without clear economic justification, relevant agencies should intervene promptly to stabilize the market and ensure sustainable development.

Real Estate Market Outlook for 2025

Mr. Nguyễn Văn Đính, Chairman of the Vietnam Association of Real Estate Brokers, believes that if the government’s target of 8% GDP growth is achieved, both housing demand and real estate investment will continue to rise. However, due to high costs, significant price reductions in the market are unlikely.

Economic expert, Associate Professor-Dr. Đinh Trọng Thịnh, sees 2025 as a crucial milestone, with the implementation of the revised Land Law, Housing Law, and Real Estate Business Law. These changes will not only enhance market transparency but also drive sustainable development, particularly in social and worker housing sectors.

Additionally, the trend of digitalization and technological applications in the real estate market is expected to bring major breakthroughs. Online trading platforms are optimizing buying and selling processes, reducing intermediary costs, and improving market transparency. Moreover, the development of smart cities will drive demand for green technology projects, fostering the growth of energy-efficient and environmentally friendly buildings.

Conclusion

In 2025, Vietnam’s real estate market is poised for strong recovery and growth, supported by legal policy enhancements, institutional reforms, and macroeconomic stability. Removing legal barriers, controlling prices, and boosting supply will be key factors in ensuring the market’s sustainable development.

However, to ensure long-term stability, close cooperation between the government, businesses, and financial institutions is essential. Strengthening supportive policies, strictly regulating speculative activities, and improving market transparency will help Vietnam's real estate market maintain its position as an investment hotspot while meeting housing needs and contributing to national economic growth.

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