Vietnam’s developers and policymakers see openings as buyers chase affordability

The government is attempting to address tight supply and rampant speculation that have pushed house prices beyond the reach of domestic buyers

Vietnam’s property boom is starting to look like a squeeze.

“If you think Vietnam is still cheap, I have bad news for you,” attorney and influencer Ken Duong tells his more than 150,000 followers. “Vietnam’s real estate market is getting totally, absurdly out of control. Prices are climbing so fast that normal people look at home ownership and renting the way they would private jets,” he says.

Duong’s tone is characteristically dramatic. But when he posted the clip in February, the underlying point was hard to dismiss. While investing in Vietnam’s real estate has long been popular among locals—partly due to restrictions on overseas investment—rampant speculation and tight supply have sent prices soaring. Apartment prices rose by between 20% and 30% last year, while land plots increased by up to 25%, according to the construction ministry. In major cities, prices reached an average of VND100 million (approximately USD3,804) per square metre. The average annual salary of Vietnamese workers is around VND100 million, according to government data.

One of the main drivers of higher prices has been credit growth. To meet its economic growth target of 8.5% last year, the government encouraged private lending. The International Monetary Fund said loans disbursed in 2024 were equivalent to 136.4% of Vietnam’s USD476 billion GDP—more than three times the median in emerging and middle-income markets. Adding to price pressures is a shortage of new housing, caused by lengthy approval processes and limited land banks. Realtors say properties are being bought and resold within months, often sitting empty for long periods.

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Towards the end of last year, the government moved to rein in the market. Vietnam’s prime minister said more homes need to be built to cool prices and improve affordability for young people, who are increasingly turning to mortgages rather than buying outright, which is still relatively uncommon in Vietnam.

“Many people need housing, but they can’t afford it because of high prices,” Pham Minh Chinh said earlier this year.

His comments followed warnings from economists about the risk of an asset bubble. In September, two senior academics raised concerns in a closed-door meeting with government officials. In a rare instance of criticism passing censors, they warned that the credit surge was unsustainable.

“Vietnam’s money supply growth rate is very high, leading to the highest credit-to-GDP ratio in the region, and to risks of inflation and asset price bubbles,” says Pham The Anh, dean of economics at Vietnam’s National Economics University.

Chinh has pledged to cut costs and simplify administrative procedures for developers. He has also instructed the central bank to explore real estate loans at “reasonable interest rates”, according to a government statement. In response, the State Bank of Vietnam has reduced its credit growth target to around 15% this year, down from 16% initially set for 2025 before being raised during the year.

Approvals are speeding up, projects are restarting, and banks have been encouraged to increase loan-to-value ratios and lending

“In our view, the State Bank of Vietnam has tried to be receptive to market feedback,” says Willie Tanioto of Fitch Ratings, noting that the target may shift again or be scrapped.

While prices are not expected to fall in the near term, some analysts say recent measures are starting to curb speculation and support new supply, particularly since the Lunar New Year.

“Since the government has settled after Tet, projects are moving more quickly, with a clear push on infrastructure and planning,” says David Jackson, CEO of Avison Young for Vietnam and Cambodia. “[President] To Lam sees real estate as a way to accelerate growth. Approvals are speeding up, projects are restarting, and banks have been encouraged to increase loan-to-value ratios and lending. This is rebuilding confidence, but in a more measured way.”

According to Jackson’s research, Ho Chi Minh City’s new condominium supply in Q1 2026 was concentrated in Binh Duong’s mid-market segment, while in Hanoi, units priced below USD2,500 per square metre have largely disappeared as higher-end supply dominates. Danang is seeing a shift from short-term speculation to longer-term investment in condominiums. Meanwhile, landed housing in Ho Chi Minh City and surrounding areas has been boosted by the USD18-billion Vinhomes Green Paradise project in Can Gio, which will accommodate up to 230,000 people. Hanoi’s landed housing sector, by contrast, remains constrained by limited supply.

Thien Duong, general director at architecture firm Group SA, said a series of new laws should help unlock supply. The 2024 Land Law, the 2023 Housing Law, the Law on Real Estate Business, and new land pricing regulations are expected to be fully implemented by the end of this year. These reforms aim to promote market-based pricing, tighter oversight, and clearer rules for transactions. “Legal reforms across land, housing, real estate, and investment—combined with efforts to cut procedures and unlock stalled projects—are pushing the market towards greater transparency and more sustainable, demand-driven growth,” he says.

For now, the direction of travel is clear: more supply, tighter credit, and a more controlled pace of growth. Whether that is enough to bring prices back within reach is less certain. Until it is, Vietnam’s property market will remain defined less by opportunity than by access—and who can still afford it.

This article was originally published on asiarealestatesummit.com. Write to our editors at [email protected].