Vietnam real estate outlook remains strong amid tariff uncertainty

With possible punitive US tariffs looming over the economy, Vietnam’s otherwise buoyant housing market has entered a cautious stage following strong growth in the first quarter of 2025

When Vietnam’s largest private housing developer Vinhomes launched new project Wonder City in the western outskirts of Hanoi in early March, 90 percent of first-phase units sold out within four days, a company sales representative told local journalists and investors.

Vinhomes had pitched the project as an antidote to the capital’s increasingly expensive and crowded residential market: Just 15 minutes by car from the city centre, once a new highway has been completed, the project offers high-end, low-rise apartments surrounded by manicured gardens at less than half the price of those in more sought-after parts of Hanoi.

Buzz around the project caused rental prices around Wonder City to multiply ahead of its launch, according to Ho Chi Minh City-based DNSE Securities. “The hotness of real estate prices and rental prices around the project also reflects the hotness of this project,” DNSE told investors, one of many positive assessments published on the project’s investment potential, and the market responded.

Following the launch, the Vinhomes share price climbed more than 13 percent to mid-April as the HCMC market index slid nearly eight percent over the same period. The only blip in the Vinhomes share price: US President Donald Trump’s announcement on April 2 that Vietnam’s exports would be hit by new tariffs of 46 percent.

Although Trump later suspended his new trade policy on most countries for 90 days, Vietnam remained subject to blanket 10 percent temporary tariffs and may still be hit at the new 46 percent rate in July, prompting a wait-and-see approach in the country’s real estate industry.

The potential for considerable damage to Vietnam’s otherwise booming economy remains all too real. Nearly three out of every 10 of the country’s products go to the US, double the percentage of Chinese exports to the world’s largest economy.

In 2024, Vietnam recorded GDP growth of more than seven percent, by far the highest in the ASEAN region, and among the most dynamic in the world. Last year, the size of Vietnam’s economy overtook that of the Philippines to become the fourth-largest in the ASEAN bloc behind Indonesia, Singapore, and Thailand. Registering less than three percent GDP growth last year, Thailand’s stalling economy is expected to be overtaken by Vietnam before the close of the next decade.

In mid-February, Vietnam’s parliament revised upwards its economic growth target for this year to more than eight percent, with some provinces aiming for expansion above 13 percent.

In late March, days before Trump announced his new tariff policy, the World Bank offered a more sober forecast for Vietnam’s economy this year but also raised its growth projection to 6.8 percent. “Vietnam is projected to maintain robust economic growth over the next two years, but it can use its fiscal space to better prepare for heightened uncertainties,” said World Bank Vietnam country director Mariam Sherman, acknowledging the risks around looming yet still unconfirmed additional tariffs on Vietnam’s exports to the US.

Whatever happens next, Vietnam’s real estate market remains on solid ground, according to data and commentary from industry observers in the country. In Hanoi, new condo supply tripled last year to nearly 40,000 units, with sales completed on more than 70 percent of these properties, and prices soaring by close to 24 percent compared to a year earlier, according to data from CBRE. In the first quarter of this year, prices continued to rise, climbing five percent compared to the previous quarter, Savills data showed.

Vietnam’s economic hub HCMC recorded far fewer new residential projects, and sales of landed properties fell steeply by 50 percent compared to 2023 amid soaring prices again in the city last year. Yet HCMC’s first subway line and further infrastructure development were expected to “stimulate the market” through this year, according to JLL. As in Hanoi, residential sales in HCMC were sharply down in the first quarter compared to the previous quarter due to the Tet Holiday, but up on the same quarter the previous year, Savills data showed.

What happens next remains difficult to predict, says Alex Crane, managing director of Knight Frank Vietnam: “Right now, it is a wait-and-see approach in most segments we are working in, and indeed for our analysis on what happens, subject to the ongoing ‘negotiation’ between the Vietnamese and US governments.”

Considering the overall property market including manufacturing, office, retail, hospitality, and residential, Crane says current deals of significant size will be “on hold” and reviewed, with assumptions and underwriting “queried to the fullest.” He adds that large capital expenses for commercial occupiers are likely to be “held back in the short term,” pending tariff outcomes.

The biggest question marks, apart from implementation of the Trump tariffs themselves, remain impacts on supply chains, volume forecasts for commercial and residential leases and sales, and possible responses from the central bank and other lenders, according to Crane.

Although the weak dollar has helped prop up the traditionally fragile Vietnamese dong in the short term, the prospect of lower interest rates and exports promises to erode currency stability looking further ahead. Still, borrowing costs are expected to fall, leading to lower mortgage repayments in a residential market which is likely to be viewed as a relatively stable investment amid talk of tariff turmoil.

Uncertainty over US tariffs comes at a critical moment for Vietnam’s housing industry, and development of the wider economy. The country is aiming to reach upper-middleincome status by the end of this decade, surpassing USD4,515 in annual income per capita, but is facing familiar challenges, among them spiralling housing prices.

Market observers in Vietnam have in recent months increasingly warned of the growing unaffordability of housing in the country as prices have continued to outstrip income growth for many in this country of over 100 million people. From the start of 2023 to the end of the year, the average selling price of an apartment in Hanoi rose by 58 percent, according to data from the Ministry of Construction.

“Real estate prices are increasing rapidly, putting the opportunity to own a home out of reach for most people, especially in key economic centres like Hanoi and Ho Chi Minh City,” Vietnamese economist Dinh The Hien told a roundtable discussing the problem in HCMC at the end of last year.

In April, Savills released its first-quarter report titled “Vietnam affordable housing is slipping further out of reach,” forecasting that secondary cities “may offer a much-needed solution” to the limited stock of affordable housing in the country’s two biggest cities, particularly Hanoi. In the third quarter of 2024, average apartment prices in the capital overtook those in HCMC for the first time, a key reason why affordable, out-of-town developments such as Vinhomes Wonder City have become attractive to the country’s middle class—now 30 percent of the population or around 30 million people.

This huge, rapidly expanding segment alone represents a considerable new driver of economic and housing activity in Vietnam, accounting for a population equivalent to that of neighbouring Cambodia and Laos combined, and even surpassing ASEAN’s most developed economy, Singapore.

While many market analysts have warned that rising house prices may have started to stunt sales in Hanoi and HCMC, the flipside is that Vietnam’s maturing economy is also expanding the pool of high-net-worth Vietnamese individuals, boosting demand for the emerging ultra-luxury housing class.

The key to unlocking real estate value in Vietnam, amid the recent uncertainty, remains the recognition of the country’s long-term fundamentals, including its young, large population, relatively stable political environment, and ‘robust growth trajectory’

Between 2023 and 2028, this top bracket of Vietnam’s wealthy—those with more than USD30 million in investible assets—is expected to climb 30 percent, the fastest growth rate in mainland Southeast Asia after Malaysia, and double that of Thailand and Singapore, according to Knight Frank. By 2028, Vietnam is expected to be home to nearly 1,000 individuals in this wealth tier, driving demand for ultra-luxury residences in a market where the very richest have historically tended to seek the best properties abroad.

In late February, JW Marriott and Marriott opened a second Grand Marina Saigon ultra-luxury residence in HCMC’s sought-after District 1, a 46-storey tower offering its lowest-priced units from USD14,000 per square metre, and penthouses approaching USD20,000 per sqm. Whether the looming tariff headwinds will impact sales remains to be seen.

The key to unlocking real estate value in Vietnam, amid the recent uncertainty, remains recognition of the country’s long-term fundamentals, including its young, large population, relatively stable political environment, and “robust growth trajectory,” says Matthew Powell, a director at Savills in Hanoi.

“Vietnam entered 2025 with remarkable economic momentum,” Powell says. “Ultimately, while US tariffs pose a significant headwind, Vietnam’s housing market is supported by deep structural drivers. As long as the macro environment remains somewhat stable, the sector may bend but it’s unlikely to break.”

The original version of this article appeared in PropertyGuru Property Report Magazine Issue No. 190 on issuu and Magzter. Write to our editors at [email protected].