Solid foundation and long-term prospects will help Vietnam's real estate market overcome short-term fluctuations.

Avison Young Vietnam today released its Q1/2025 Quarterly Report of the Vietnam Real Estate market. The report outlines developments in key real estate segments in the first quarter of 2025 and forecast for the rest of this year.

In Q1/2025, Vietnam’s real estate market saw positive signals, raising expectations for a broader recovery throughout the year. FDI inflows into real estate surged by 46% year-on-year, reaching nearly 2.4 billion USD. The government continued to boost public investment and implement new legal frameworks, while some localities such as Hanoi, Ho Chi Minh City (HCMC), Binh Duong, Dong Nai, and Ba Ria – Vung Tau announced plans for land auctions, providing land banks for new developments. Mergers and acquisitions (M&A) and project transfers also remained active, indicating continued investor interest and confidence in the market’s long-term potential.

“The market has had a relatively smooth start to the year. The U.S.’s unexpected announcement of 46% reciprocal tax policy on certain Vietnamese exports has triggered short-term concerns. That said, Vietnam still maintains its solid position as an attractive investment destination in the region, thanks to its labor force, affordable production costs, strategic location, and effective FDI incentives. These advantages will continue to underpin the real estate sector's recovery. The Vietnamese Government has set a clear path to the nation’s success and with their experiences in negotiation, Vietnam will get the best outcomes from this shift in international trade.” – said David Jackson, Principal and CEO, Avison Young Vietnam.

New office supply drives optimism in three major markets

In Q1/2025, the office markets in Hanoi, HCMC, and Da Nang all recorded new projects. With demand for office space in Vietnam becoming increasingly diverse, the outlook for this segment remains positive. However, competition is expected to intensify as supply continues to grow. This calls for developers to adopt flexible pricing strategies, offer tailored amenities, and accelerate digital transformation and green office models to stay competitive.

In Hanoi, the launch of Grade-A ThaiSquare Caliria added over 8,400 sqm of leasable area, alongside other small- to mid-sized developments. This reflects a growing trend to cater to the flexible space and cost needs of SMEs and startups. Additionally, greater emphasis is being placed on green workspaces, integrated technology, and quality standards.

In Da Nang, the ICT1 building within Software Park No. 2 began operations in January, targeting innovative companies in semiconductors and AI. Grade A and B office rents remained stable at 31 USD/sqm/month and 15 USD/sqm/month, respectively, indicating a balanced supply-demand dynamic.

In HCMC, rental prices and occupancy rates for Grade A and B offices in Central Business Districts held steady at 55 USD/sqm/month and 28 USD/sqm/month. New supply included CT Dream and CT Space (5,000 sqm total) in Phu Nhuan and Tan Phu districts, the 7,000-sqm Beacon tower and the 20th Regus co-working space (2,000 sqm) by International Workplace Group in Binh Thanh district. The increasing presence of office space in non-CBD areas is expected to heighten competition in rental pricing and occupancy, especially from Q2/2025 onwards as more projects come into operation.

Condominium prices in HCMC continue to rise, transactions in Hanoi saw a pause due to cautious sentiment

Q1/2025 was a relatively quiet period for apartment transactions due to extended holidays and cautious market sentiment among both buyers and investors. Nonetheless, prices continued their upward trend in key cities.

In HCMC, apartment prices rose 6% compared to the end of 2024, reaching an average of 3,200–5,200 USD/sqm. Notably, secondary prices of projects along Metro Line 1 saw sharp increases; some by as much as 20% year-on-year, such as Gateway Thao Dien and Lumière Riverside. Recent supply mainly came from new sales phases of Eaton Park, The Opus One, and 616 units at Masteri Grand View. In 2025, HCMC is expected to see 17 new projects and four social housing developments completed. Neighboring provinces like Binh Duong and Long An continue to lead new supply thanks to abundant land and favorable infrastructure connectivity.

In Da Nang, the announcement of new land price list and approval of the APT Tower project contributed to a modest rise in condominium prices, with future supply still leaning toward the high-end segment.

In Hanoi, transaction volumes weakened compared to previous quarters, with primary selling prices ranging from 2,600–3,700 USD/sqm, unchanged from Q4/2024. Yet, investment, groundbreaking, and project transfers remain active, such as in developments like Vinhomes Global City and the Me Linh new urban area, indicating continued efforts to expand land portfolios.

Rapid urbanization and rising home prices are expected to drive increased rental demand, presenting both challenges and opportunities. While it is the call to improve affordability in new developments, it also opens up potential for absorption rates, liquidity, and stronger rental yields in projects that align closely with real end-user demand.

New industrial park projects expand the national map

Vietnam’s industrial real estate sector saw a wave of newly approved and initiated projects nationwide in Q1/2025, underscoring the proactive stance of developers and the Government’s commitment to attracting high-quality FDI for economic growth. The recent growth in capital inflow into high-tech and semiconductor industries demonstrates Vietnam’s appeal to technology investors. With the Vietnamese Government’s flexible approach to AI regulations, commitment in developing skilled workforce, innovation ecosystem for sustained technological progress, Vietnam may leapfrog other traditional tech hubs in the future.

HCMC continues to focus on attracting investment in semiconductors and high-tech industry. In Q1/2025, a plasma derivative production facility broke ground in Saigon High-Tech Park. Additionally, a semiconductor plant is also scheduled to be inaugurated in 2025. The city’s continued leadership in high-value investment is influencing surrounding provinces: Ba Ria – Vung Tau is planning four new industrial parks (totaling over 3,800 ha), Long An launched its first eco-industrial park, and Binh Duong recorded an investment plan of a major data center campus.

In Central Vietnam, Da Nang is expanding its industrial land bank, with plans to construct and call for investment of the production, trade – services, and logistics zones within its Free Trade Zone, as well as commenced the construction of 400-ha Hoa Ninh Industrial Park in Hoa Vang district. Nearby provinces are also initiating large-scale projects, including Phu My Industrial Park (Phase 1) in Binh Dinh and VSIP II in Quang Ngai.

Meanwhile, the Northern region remains a hotspot for industrial development. Hanoi’s occupancy rate reached 93%, up 5% from late 2024. The Capital approved planning for a clean industrial park in Soc Son and new industrial clusters in Thach That and Thuong Tin districts. Other provinces including Nghe An, Bac Giang, Hai Phong, Thai Nguyen, Quang Ninh, Thai Binh, and Nam Dinh also saw multiple projects either launched or approved during the quarter.

Chi Vu – Senior Manager, Industrial Services of Avison Young Vietnam commented: “The acceleration of investment, planning, and construction at the beginning of the year reflects strong confidence and mid-to-long-term optimism for Vietnam’s industrial real estate market. The proposed 46% reciprocal tax by the U.S., while causing short-term fluctuations, also presents an opportunity for Vietnam to accelerate diversification of trade partnerships, optimize incentive policies, and attract investment in support of its long-term development goals.”

Serviced apartments thrive on record-breaking international arrivals in Q1/2025

Vietnam welcomed a record number of international visitors in Q1/2025, significantly boosting the serviced apartment segment. In HCMC, demand from high-end clients surged, particularly for Grade A serviced apartments. Operators adapted rental policies to optimize occupancy, including combining adjacent smaller units into larger spaces for group rentals. Grade A rents reached 42 USD/sqm/month, up 8% and occupancy rates reached 85%, up 9% quarter-on-quarter.

In Hanoi, projects with international branded operators such as Somerset West Point (The Ascott Limited), InterContinental Hanoi Westlake (IHG), and Sheraton Hanoi (Marriott) recorded better leasing performance, underscoring tenant preference for professional services and amenities.

With tightening regulations on short-term rentals in condominium units, serviced apartments, which are licensed for lodging and professionally managed, could be a more suitable accommodation solution. Notably, travelers from Russia, South Korea, and China, Vietnam’s large inbound markets, are increasingly opting for high-quality accommodations, paving the way for sustained growth in this segment.