Vietnam Construction Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Vietnam Construction Market Trends and Insights

Rapid Urbanization and Housing Demand

Urbanization and new real estate laws are improving supply timelines in 2026, yet affordability and location dynamics are shaping a segmented recovery. The Ministry of Construction recorded a large affordable housing gap and reported that 102,633 social housing units were completed in 2025 toward the nationwide program, while mortgage rates remained in the 5% to 6% range to support end-user demand. Major pipeline additions are concentrated in Hanoi and Ho Chi Minh City, with several large projects moving forward post-2026, while select northern provinces are drawing new residential investment linked to manufacturing corridors. Real estate FDI picked up in 2024 and included commitments from established Asian developers such as Nomura Real Estate and local partners, reinforcing long-term housing and township plans near industrial zones. A rising share of projects target green certification pathways, which can command price premiums but also require supply chain readiness for low-carbon materials in line with Vietnam’s net-zero ambitions.^{[2]https://www.sbv.gov.vn/vi/trang-chu}

Government Infrastructure and PPP Pipeline

Vietnam has enhanced its PPP framework with higher viability gap funding and revenue-sharing provisions to improve project bankability for transport, urban, and energy assets. Implementation still hinges on demand certainty for user-pay projects, and large rail proposals require substantial state support alongside private participation to proceed at scale. The model functions as co-financing in practice, with state-owned enterprises and diversified conglomerates providing anchor sponsorship on priority corridors and airports to manage delivery risk. Transit-oriented development requirements attached to new metro sections are intended to improve asset monetization, but value realization often lags until operations stabilize, which can create timing gaps for investors. Regulatory constraints on land and security interests for foreign lenders also shape financing structures and can raise all-in costs unless mitigated through local banking partnerships. Emerging green financing standards from multilaterals are pushing projects to adopt environmental management systems and product carbon verification for eligible supply chains.^{[3]https://www.ifc.org/en/home}

Rising FDI-led Industrial Construction

Manufacturing-led FDI realized in 2025 remained high and is shifting toward higher value production in electronics and energy components, which lifts requirements for precision facilities. Global manufacturers such as Samsung and LG continued to expand their footprints, which increases demand for cleanrooms, vibration-controlled foundations, and high-bay automated warehouses. Specialty capability building is visible through moves like Coteccons acquiring a foundation specialist and EPC firms such as LILAMA delivering complex LNG-to-power packages. The pipeline of new industrial parks approved in 2025 positions northern and north-central provinces to capture supplier ecosystems linked to electronics, semiconductors, and renewable components. Industrial park developers increasingly embed sustainability and ready-built utilities to meet tenant standards and shorten the time to production for incoming manufacturers.

Expansion of Renewable-Energy Projects

Power Development Plan VIII sets ambitious capacity targets for wind, solar, LNG-to-power, and storage by 2030, which will require large-scale construction across generation and grid systems. Transmission readiness is a binding constraint in several regions and select 500 kV nodes face load risks without accelerated upgrades in the 2026 to 2030 window. Legacy FIT and acceptance certificate issues from past waves have slowed investment decisions for new greenfield projects despite long-term demand signals. New rules enable direct power purchase for large users and allow private grid links in defined cases, which can unlock industrial offtake where public grid capacity is congested. Storage requirements for utility-scale renewables and supply concentration in battery systems call for careful procurement planning to meet performance and reliability targets. Offshore wind could draw significant capital if licensing, survey, and offtake processes shorten and if enabling grid capacity is prioritized.

Skilled-Labour Shortage and Aging Workforce

A limited pool of certified trades and steady outflows of workers to overseas markets are tightening labor availability for complex builds. The share of workers with formal vocational credentials remains low, which raises on-site training needs for contractors and lengthens mobilization for specialized scopes. Wage inflation for certified welders and specialized crews increased in 2025, and leading contractors reported margin pressure despite healthy order books. Youth underemployment and societal preferences for university tracks over technical pathways add friction to replenishing core trades. Policy measures to expand high-tech training incentives take effect in 2026 and are intended to accelerate skill localization for advanced projects.

Construction-Material Price Volatility

Late-2025 storm damage and input cost increases triggered sharp spikes in roof tiles and rebar, highlighting exposure for lump-sum contractors without price-adjustment clauses. Cement producers faced cost pressures from electricity and fuel, and some announced price increases in early 2025 as financial performance weakened in 2024. Electricity tariffs rose in late 2024, which disproportionately affected energy-intensive materials like cement and contributed to persistent pricing risk for infrastructure packages. Domestic steel procurement remains concentrated among a few players, and anti-dumping duties have reduced low-cost import options, adding to volatility. Contract adjustment provisions in the amended Construction Law apply from mid-2026 and are expected to clarify relief conditions for abnormal price swings. Developers with partial vertical integration into materials and aggregates report more stable unit costs through shocks compared to spot buyers.

Segment Analysis

By Sector: Infrastructure Accelerates as FDI and PPP Pipelines Converge

Residential construction held a 39.10% share of the Vietnam construction market in 2025, while infrastructure recorded the fastest trajectory with an 8.88% CAGR expected through 2031. The housing program for one million social units, combined with mortgage rates at 5% to 6%, stabilizes end-user activity even as affordability limits weigh on mid-tier segments in certain provinces. Large-scale infrastructure builds include the North-South high-speed railway plan, the Long Thanh International Airport program, and expressway expansion toward a 2030 target, which together lift engineering and construction workloads. The industrial and logistics subsegment is benefiting from realized manufacturing FDI in 2025, which is the main driver for new factories, ready-built facilities, and supplier parks. Developers and EPC firms that align with tenant sustainability requirements and cleanroom or high-bay specifications are capturing the higher-value scopes.

Transportation is the central node within infrastructure, as new road, rail, and airport capacity is prioritized on economic corridors that link northern and southern regions. New rail links from border provinces to seaports and wider metro plans in both Hanoi and Ho Chi Minh City are moving through phased execution as land clearance and funding packages are sequenced. Energy and utilities require capital at scale under PDP VIII, with LNG power, wind, solar, and storage needs translating into a broad EPC opportunity set. Transmission grid projects are a critical unlock for new renewable capacity, and designated 500 kV backbones remain a priority in the current plan period. Compliance with international standards for turbines, safety systems, and monitoring is increasingly a prerequisite for financing and procurement, shaping vendor selection across energy packages.

Note: Segment shares of all individual segments available upon report purchase

By Construction Type: Renovation Gains Momentum as Asset Owners Retrofit for Net-Zero Mandates

New construction accounted for 68.10% of the Vietnam construction market in 2025, and renovation is projected to grow at a 7.99% CAGR to 2031 as owners prioritize retrofit strategies. Public investment is supporting greenfield expressways, airports, and rail, while the manufacturing pipeline sustains new industrial builds across core regions. Renovation demand is rising with the need to upgrade state-built assets and private portfolios to meet energy performance, digital infrastructure, and compliance expectations. Housing support mechanisms for social and workers’ housing and policies to improve the quality and safety of older apartment stock are reinforcing the retrofit trend. Financial incentives that lower borrowing costs for eligible housing projects also encourage upgrades alongside new supply additions.

Within new construction, capital and order books are concentrated in projects above the USD 38 million threshold for transport and mega mixed-use, which account for a large value share despite a smaller project count. Renovation specialists with capabilities in adaptive reuse, energy-efficient MEP upgrades, and digital retrofits are securing premium pricing where they can lock in delivery certainty for operational sites. The policy push to digitize real estate transactions and assign digital IDs to properties will nudge owners to lift documentation, safety, and performance standards before listing or refinancing assets. The Vietnam construction industry is also seeing data infrastructure upgrades in offices, parks, and campuses to support connectivity and edge computing workloads. Projects that align with environmental management standards are better positioned to access international financing linked to climate objectives.

By Construction Method: Modular Systems Gain Share as Labor Costs Surge and Timelines Compress

Conventional on-site execution held 94.88% of the Vietnam construction market in 2025, while modern methods of construction are on track to grow at a 9.55% CAGR through 2031 from a low base. A large workforce and widespread adoption of cast-in-place concrete keep conventional methods dominant for heavy civil and large structural work. Modular and prefabricated solutions are gaining traction as contractors respond to tighter schedules in industrial builds and to sustainability targets that favour off-site fabrication. Technology investments by leading firms and product innovations by materials suppliers signal a shift to standardized systems where feasible. Examples include specialized scaffolding and advanced transfer slab techniques applied to high-rise projects and modular plumbing systems with recognized third-party certifications.

Barriers to adoption include upfront investment for precast plants, logistics costs for moving large components, and site constraints in urban settings that limit staging for modules. Even so, repetitive residential units, high-bay warehouses, and data center shells are well suited to modern methods that yield consistent quality and shorter cycle times. The Vietnam construction industry is seeing competitive differentiation around foundation engineering and floor flatness tolerances as semiconductor and data center projects set tighter benchmarks. Policy emphasis on high technology adoption and BIM is expected to accelerate digital workflows and factory-controlled production in the next build cycle. Developers and contractors that integrate design, manufacturing, and install teams are positioned to capture savings and reduce schedule risk for time-sensitive FDI projects.

By Investment Source: Private Capital Pivots Toward Transit-Oriented and Industrial Mixed-Use

Public investment held 63.10% of the Vietnam construction market in 2025, while private capital is projected to grow at a 9.07% CAGR through 2031 as PPP rules and credit programs improve access. Government disbursement is targeted at expressways, rail, and airports, and budget execution remains a focus as authorities work to simplify procedures and accelerate site handover. Private sponsors are increasingly active in transit-oriented mixed-use and in industrial platforms where real estate and infrastructure are developed in tandem. High-profile PPP proposals in Ho Chi Minh City and new metro phases illustrate how private partners can monetize adjacent land and services alongside core transport assets. Preferential credit windows for national key projects and strategic technology programs are designed to draw in long-term loans at lower rates in 2026.

Public funds dominate cross-border rail and national corridors where strategic goals outweigh near-term commercial returns, while private flows concentrate on recoverable cash flows linked to land value and industrial demand. Conglomerates with integrated ecosystems across housing, retail, and transport are using internal cross-subsidies to unlock complex projects and manage early-stage cash flow gaps. Foreign direct investment reached USD 27.62 billion disbursed in 2025, and manufacturing remained the leading destination, reinforcing demand for industrial and logistics assets. Compliance with ISO-based management systems and product stewardship rules, combined with green building certifications, is becoming a selection factor in both public procurement and PPPs. Sponsors that meet these criteria improve their ability to secure blended finance and development bank support for capital-intensive programs.

Geography Analysis

Ho Chi Minh City held 36.88% of the Vietnam construction market share in 2025 and continues to anchor large PPP proposals in urban rail and major bridges alongside a robust mixed-use pipeline. The city’s program includes additional metro connectivity, major ring road works, and selective large-scale sports and cultural venues that catalyze surrounding development. Despite a healthy volume of housing under construction, prime office vacancy remained elevated in 2024, pushing repositioning strategies in secondary submarkets. Execution challenges from land clearance and input price volatility persisted through late 2025, which required tighter cost management on public works and private builds. Digitization of real estate transactions and property IDs is expected to improve transparency and support better portfolio curation across the city in 2026.

Hanoi and Da Nang show distinct growth drivers that complement Ho Chi Minh City’s scale. Hanoi drew sizable foreign commitments in 2025, much of it into real estate, and is advancing an extensive metro vision supported by new interprovincial rail construction that started in December 2025. Northern satellites, including Bac Ninh and Thai Nguyen, are attracting industrial spillover and advancing major transport and airport proposals to support manufacturing clusters. Japanese developers have moved forward with new industrial parks and residential projects that emphasize sustainability features to meet tenant standards. Da Nang remains a central-coast gateway with growing energy logistics and coastal mixed-use activity that leverages its strategic location on the East-West Economic Corridor. Regional seaport and LNG projects in neighboring provinces complement Da Nang’s tourism and logistics footprint and create workstreams for specialized contractors.

The Rest of Vietnam is forecast to grow at a 7.77% CAGR through 2031, outpacing the main hubs as national expressway and coastal corridor projects improve market access for logistics and agro-industry. The Mekong Delta offers a large wind and solar opportunity set but needs coordinated transmission upgrades to integrate new capacity under PDP VIII. In the central highlands and along the central coast, tourism-oriented infrastructure and new industrial platforms are adding construction demand in second-tier provinces. Northern border provinces benefit from rail plans that link to seaports and enable a manufacturing-export corridor aligned with China-facing trade. Industrial parks in secondary provinces are positioned to capture value where labor pools are available and where green power access can be arranged for anchor tenants.