Vietnam Luxury Residential Real Estate Market Size

Vietnam Luxury Residential Real Estate Market Analysis

The Vietnam Luxury Residential Real Estate Market size in terms of transaction value is expected to grow from USD 3.64 billion in 2024 to USD 6.89 billion by 2029, at a CAGR of 13.65% during the forecast period (2024-2029).

Real estate prices, particularly rents, dropped much during the COVID-19 pandemic, pushing developers and agents to the limit. With travel restrictions, agents were forced to focus primarily on local buyers due to the few remaining foreigners. Despite the downturn, deals were made in the market for those who worked with experienced and credible partners with boots on the ground. Particularly high demand has been seen for distressed luxury units that can fetch prices that are 20% lower than usual.

Vietnam is emerging as a thriving real estate market in Southeast Asia, with HCMC (Ho Chi Minh City) being among the locations where housing prices are increasing rapidly. Vietnam is among the 10 fastest-growing property markets in the upscale segment. Vietnam is also emerging as a country with rapid growth in affluence and demand for upscale properties. However, the spurt in prices and supply, which shows no signs of stopping, is causing concern about luxury apartments and branded residences developing too fast, causing the market to overheat.

The number of local and international customers in the luxury apartment market is rising in Vietnam. Vietnam has begun to be seen as the next luxury property market hotspot, with a booming economy coupled with laws that recently have made it easier for foreigners to buy. As a result, wealthy international investors have been drawn to the country. The burgeoning middle-and upper-classes and the inflow of foreign talents emerging in Vietnam have stimulated the demand for high-quality residences. In the meantime, property prices in neighboring countries such as Hong Kong, Thailand, Taiwan, and Singapore are becoming too expensive. For example, a luxury apartment in a prime location in HCMC costs around USD 5,000 per square meter. In contrast, the same apartment can cost four times more in Singapore and Hong Kong, making Vietnam an ideal destination for investors.

In 2022, the Vietnamese real estate market saw ups and downs, and many businesses in the sector were compelled to restructure by reducing expenses and staff. The post-pandemic economic recovery in the nation and early indications of a recovery in the sector marked the beginning of the year. However, the market started to stall in the second quarter of 2022.

Only approximately 1,250 units were available during the third quarter, and trading decreased to under 52%. Only 450 units were up for main sale in the city in the last quarter, and only roughly 100 apartments were sold. The HCMC Real Estate Association reports that the cost of homes has increased over the previous five years (HoREA). The highest affordable housing unit pricing is around USD 84,620, roughly 20 times more than the average Vietnamese worker's yearly wage.