Real estate in 2025: Put money in Hanoi , Ho Chi Minh City or Da Nang?
At the WeTalk program "What to invest in 2025?" organized by the Vietnam Financial Advisors Community (VWA) on January 11, Mr. Phan Le Thanh Long, Chairman of the Vietnam Financial Advisors Community (VWA) shared his opinion on the real estate market in 2025.
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| Mr. Phan Le Thanh Long, Chairman of Vietnam Financial Advisors Community (VWA) |
Supply increases but market is unlikely to have a breakthrough
According to Mr. Phan Le Thanh Long, in 2025, the real estate market will have many favorable factors.
Firstly, capital poured into the business sector continues to grow well. In 2024, real estate business credit increased by nearly 16.6% while FDI disbursement in the real estate business sector increased by 35.2%.
Second, the risk of late payment of first-time corporate bonds is reduced.
Third, solutions to remove legal difficulties are actively deployed.
These factors bring expectations that real estate supply in 2025 will improve, both in terms of number of projects and segments.
“In the market, high-end products still dominate the supply, lacking social housing products and houses with suitable prices. Hopefully, by 2025, there will be more products with prices suitable for the majority of consumers when legal problems are cleared,” Mr. Long expected.
Although supply may increase, market demand is not expected to be able to revive. Many opinions believe that low interest rates will support the real estate market, but in reality, the low interest rate level has been maintained from the end of the first quarter of 2023 until now (nearly 2 years) in market liquidity is still very quiet. In 2024, real estate consumer credit increased by only 4.64%, proving this.
In addition, people's very weak savings also affect the demand for home purchases. Up to 65% of those surveyed said that their savings rate will remain unchanged or decrease in 2024. Therefore, most consumers expect to cut spending in 2025. Up to 66% of those surveyed want to postpone the purchase of large assets such as cars and real estate in 2025.
“Overall, 2025 will be a year of continued recovery for the real estate market, but there will be no breakthroughs in any segment, especially segments that have established high price levels such as apartments in Hanoi,” said Mr. Phan Le Thanh Long.
Money flows to the South?
From the end of 2024, real estate investment cash flow shows signs of leaving high-priced areas like Hanoi to look for more reasonable areas. Housing prices in Ho Chi Minh City have increased more slowly than in Hanoi for many years, combined with high rental yields, attracting cash flow.
Mr. Phan Le Thanh Long assessed that in Ho Chi Minh City, more projects will be opened for sale from the fourth quarter of 2024 and the whole year of 2025. Supply will increase sharply when legal barriers are removed. However, real estate prices are still high compared to people's income, combined with people moving to neighboring provinces and cities, reducing demand for real estate in this area.
Experts recommend prioritizing real estate in neighboring provinces and cities with more suitable prices. The Ben Thanh - Suoi Tien metro line, which will be operational at the end of 2024, will cause many people to gradually move to the suburbs and suburbs, closely following public transport routes. The TOD trend (urban development model linked to public transport) is developing due to its reasonable price, convenient transportation, and attracting investment cash flow.
In Hanoi, housing demand in 2025 is still very high, but speculative and investment cash flow tends to shift out of Hanoi (due to high prices). Real estate supply in Hanoi is also more limited than in Ho Chi Minh City, there are not many new projects opening for sale, nor are there major changes in infrastructure... In general, real estate prices will remain the same or have to decrease in products with high prices far exceeding their actual value. The market expects products with more suitable prices to appear.
The real estate market in Da Nang has been flat for several years now and is likely to recover slightly from mid-2025 thanks to the National Assembly passing a Resolution on piloting a number of specific mechanisms and policies for the development of Da Nang City.
According to expert Phan Le Thanh Long, the real estate market in 2025-2026 is still in the accumulation phase. Therefore, in 2025, investors should still only prioritize products for immediate occupancy, the land segment will only be active when the market heats up.
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