Investing
Vietnam real estate 2024: a year in review
As positive signals become more evident, now is the time to restart capital flows into real estate transactions in Vietnam and embrace the new growth cycle, write Avison Young Vietnam analysts.
A corner of Nha Be district, Ho Chi Minh City, southern Vietnam. Photo courtesy of Thanh Nien (Young People) newspaper.
Globally, 2024 marks a year of significant changes: over 50 countries held elections, Fed cut rates, and Donald Trump won the presidency the second time.
In Vietnam, August 1 became a landmark date as three real estate-related laws took effect, four months earlier than planned. While market activity seemed sluggish, the underway shifts in macro-economy and geo-politics would have a profound impact on the real estate market in the coming time.
Below are five key trends shaping the Vietnam’s real estate market in 2024.
Residential segment on recovery track amid supply imbalances
In 2024, the housing market performed better than last year, driven by new apartment supply in the second half of the year, mainly high-end properties.
In Ho Chi Minh City, most new developments were from high-end segment onwards, prices reached VND72-142 million ($2,830-5,590) per square meters. Property prices of re-launched projects also went up.
In Hanoi, housing prices surged in early 2024 and continued rising throughout the year. Units priced at VND70 million/sqm became more common in Q3, and primary prices rose by 2-4% quarter-on-quarter in Q4.
Some projects introduced and open for sales in HCMC and Hanoi at year-end.
Supply in the mid-range segment continued to be limited in both HCMC and Hanoi. Apartments at affordable prices of below VND38 million ($1,500)/sqm nearly disappeared.
As prices kept going up, the housing market moved further away from intrinsic value and posed liquidity risks. The gap between market offerings and homebuyers’ needs and affordability was widening.
Meanwhile, obstacles remained in developing reasonable-priced housing. Policies and credit incentives for social housing were insufficient, while investment, leasing and purchasing processes remained complex.
Yet, there are opportunities for a more balanced market. Building more budget-friendly commercial projects and social housing in suburban or new urban areas with ample undeveloped land banks and lower development costs offers a solution to sustainable growth. Following this trend, some affordable projects have been launched recently in HCMC’s Binh Chanh district, Binh Duong province, and Dong Nai province.
New land banks for residential development will soon be available as HCMC aims to build 11 TOD compact urban areas and auction 22 land plots around metro stations. For developers, rising capital costs create a new “puzzle” where securing the land plots and balancing costs, prices, and product segmentation are critical to ensuring liquidity and operational efficiency.
New opportunities arising in industrial real estate
The industrial real estate segment remained the market’s top performer in 2024, with rising rents, growing supply, and high occupancy rates. This growth was primarily driven by FDI in manufacturing, fueled by supply chain diversification and the China+1 strategy.
In major and tier-1 markets, industrial land rents increased by 2-5% per quarter. New supply was expected to increase as numerous industrial park projects received licenses or began construction nationwide. Industrial and logistics (I&L) properties continued to attract significant interest from foreign investors, leading real estate transactions in Vietnam throughout 2024.
In the short term, the economic, trade, and geopolitical fluctuations associated with Donald Trump’s new policies may temporarily affect foreign investment and exports. However, due to its strategic location, relative political stability, competitive costs, and improving investment environments, Vietnam still has potential to become the next global manufacturing hub if seizing this opportunity.
Demand is expected to grow in these types of industrial property:
More completed legal framework in real estate, strengthened market sentiment
2024 marked a turning point for Vietnam’s legal system with the implementation of the 2024 Land Law, the 2023 Housing Law, and the 2023 Real Estate Business Law. These changes and adjustments were widely praised for their transparency, clarity, and fairness, encouraging professionalism in brokerage and transactions, and laying a sound foundation for a more sustainable real estate market.
The new laws addressed four key matters:
1. Transactions covering various real estate types and products, including completed works and off-the-plan projects.
2. Requirements on incorporation, financial capabilities and the obtainment of Land Use Rights Certificate for various investors and developers.
3. Requirements on contract and planning in the purchase and sale of Land Use Rights.
4. Eligibility and conditions for transferring real estate projects.
Some notable new points include:
However, businesses, investors, and people are looking for more detailed guidance on implementing these laws to fully realize the law’s potential.
Irreversible sustainability trend, ESG criteria shaping new projects
Over the past few years, most new office buildings in HCMC and Hanoi aimed for green certifications. Not only increasing in quantity, green offices were also expanding geographically. In HCMC, green offices are expected to develop in adjacent, vibrant and fast-growing areas such as District 4, District 7, Tan Binh district and Thu Duc city.
New office buildings with green certifications in HCMC and Hanoi in the past 2 years.
Industrial real estate has also been embracing sustainability. Notable green-certified projects recently included Hitachi Energy’s transformers factory in Bac Ninh (achieved LEED Gold), Mitsubishi Estate Group’s Logicross Hai Phong ready-buit warehouse (aiming for EDGE Advanced certified) and the Lego Vietnam factory in Binh Duong (aiming for LEED Gold for the manufacturing plant, and LEED platinum for the office).
Developers such as BW Industrial, Fraser Property, KCN Vietnam and most recently Sembcorp are pursuing modern, sustainable industrial park infrastructure.
Rising market demand drives investment decisions in green buildings in Vietnam. For investors, projects resilient to environmental and climate risks and contributing positively to society hold higher value and better asset valuations. Green-certified or ESG-compliant properties are also more appealing for partnerships and capital investments, becoming key consideration in M&A transactions.
Sharp rise in foreign investment in real estate sector despite global slowdown
In 2024, global FDI slowed, and Vietnam followed suit, with registered FDI capital reaching $31.38 billion by November – up just 1% year-on-year.
This modest growth reflected the same trend as Vietnam had economic openess and global FDI flows had declined for two consecutive years (2022-2023) due to macroeconomic instability and geopolitical tensions.
Despite this, foreign investor confidence in Vietnam remained strong, and they continued to implement licensed or approved projects. Realized FDI reached $21.68 billion in the first 11 months of 2024, a 7.1% increase year-on-year. With continued disbursements, total committed FDI for 2024 is projected to surpass last year’s figures, potentially setting a record for the 2019-2024 period.
While global manufacturing activities has not yet recovered (registered FDI to Vietnam’s manufacturing sector down 8.7% compared to the same period last year) and the world’s major real estate markets remained sluggish, the Vietnam’s real estate sector saw impressive growth in FDI. Accumulated registered FDI in real estate surged 89.1% year-on-year, reaching $5.63 billion by November.
This robust FDI inflow highlights Vietnam’s increasing appeal to foreign investors. Not only are they driven by favorable policies, investment environment, a growing population, rapid urbanization, investors also see demand outpacing supply across sectors such as industrial and logistics (I&L), housing, offices, and retail. Improvements in legal frameworks and infrastructure development in 2024 have further enhanced the real estate market’s attractiveness.
David Jackson, principal and CEO, Avison Young Vietnam. Photo courtesy of the company.
Looking at the five real estate trends above, David Jackson – principal and CEO, Avison Young Vietnam said: “Significant changes in 2024 in terms of policies, investment trends, and the business landscape give us many reasons to stay optimistic for the Vietnam’s real estate market. As positive signals become more evident, now is the time to restart capital flows into real estate transactions in Vietnam and embrace the new growth cycle.”
The Ho Chi Minh City Real Estate Association (HoREA) has proposed a pilot mechanism that would allow businesses to invest in and construct worker housing within industrial parks.
In a document submitted to the Prime Minister, contributing feedback on a draft pilot policy aimed at boosting social housing development, HoREA suggested that businesses, cooperatives, and cooperative unions operating within industrial parks be permitted to build accommodation for their workers. It also called for allowing companies to rent housing outside industrial parks for the same purpose.
HoREA emphasized that all costs related to building or renting worker housing should be recognized as legitimate business expenses and be included in the enterprise’s operating costs.
The association further recommended expanding the policy framework to allow companies within industrial parks to lease social housing or worker accommodation built by third-party developers outside the park premises.
According to Mr. Lê Hoàng Châu, Chairman of HoREA, the current Housing Law (2023) only allows companies to rent worker housing inside industrial parks, without clearly defining whether they can rent social housing outside the parks or construct such housing themselves.
With worker housing demand at industrial parks far exceeding supply, HoREA pointed out that current social housing and dormitory offerings are inadequate. Meanwhile, commercial housing remains out of reach for most workers due to high prices. Therefore, the association urges the government to introduce policies enabling manufacturing businesses—despite not operating in real estate—to develop their own accommodation solutions for employees.
HoREA underscored that such policies would create a strong legal foundation, empowering enterprises and cooperatives to proactively resolve housing issues for workers. If allowed to construct their own housing, companies could ensure homes go to those in need, boosting employee retention, improving living standards, and supporting sustainable growth in industrial zones.
The association also proposed financial support mechanisms, including tax incentives, access to preferential loans, or government-matching support, to reduce the financial burden on companies participating in worker housing development.
Previously, many businesses had expressed a desire to buy land, build housing, and offer installment-based homeownership plans to workers, whereby employees would pay monthly through salary deductions. While this model helps workers secure long-term housing, legal procedures remain a major hurdle.
Providing accommodation has increasingly become part of corporate strategies to retain labor, alongside other employee welfare policies. For example, Nissei Electric Vietnam (Linh Trung 1 Export Processing Zone, Thu Duc City) has built a dormitory complex with 285 shared rooms, housing up to 2,280 workers. Eternal Prowess Vietnam (District 12) and Thien Phat Company (Linh Trung 2 EPZ) have also invested in on-site worker housing. Thien Phat’s project includes 368 units (35m² each), rented at VND 2.2 million/month, with 80% of the units for families and 20% for shared accommodations.
As of Q2 2024, Ho Chi Minh City has 18 industrial parks with around 1,700 businesses employing approximately 320,000 workers. Citywide, over 1.3 million people are employed in factories. However, there are only 16 official worker housing complexes, accommodating about 22,000 people. The majority of workers rely on rented rooms or stay with acquaintances—often sharing 12m² rooms among 2–3 people, which consumes 15–20% of their monthly income.
From 2021 to the present, Ho Chi Minh City has completed six social housing projects with 2,700 units and is building four more with 3,000 units. By April 30, the city aims to resolve legal hurdles and break ground on 5–6 additional social housing projects, totaling around 8,000 units.
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According to Statista Market Insights, the Vietnamese semiconductor market is forecast to see healthy growth with a compound annual growth rate of 9.62 per cent between 2024 and 2027, reaching a market volume of $26.20 billion.
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| Le Quan, Senior lecturer Faculty of Engineering Fulbright University Vietnam |
Vietnam also boasts over 30 foreign-led companies in integrated circuit (IC) design, including established players like Renesas, Synopsys, and Cadence alongside innovative startups like Ampere, ADTechnology, Inphi, FingerVina, Dolphin Technology. The sector also encompasses numerous smaller firms with around 100 or fewer employees.
By 2040, Vietnam is poised to become a crucial player in the global semiconductor ecosystem, encompassing all aspects of the industry, from design and manufacturing to assembly, test, and packaging (ATP) and equipment fabrication.
The strategy emphasises the importance of fostering a skilled workforce. Vietnam boasts a strong talent pool in the semiconductor industry, with 50,000 design engineers, 200,000 electronics engineers, 500,000 technical workers, and one million software engineers. To further enhance this workforce, the strategy aims to transition up to 30,000 personnel from the existing pool of 350,000 IT and telecommunications engineers.
The global semiconductor packaging landscape is undergoing a rapid transformation, driven by a surge in new facilities across Asia. The wave of semiconductor investment in Vietnam and the industry’s demand for personnel have driven educational institutions, from top universities to vocational colleges, to launch training programmes related to semiconductors.
Last year, major universities such as Hanoi University of Science and Technology, University of IT – Vietnam National University Ho Chi Minh, and the University of Engineering and Technology announced engineering programmes specialising in semiconductors. Younger universities like FPT and Phenikaa are also making significant investments in this area, not only in training initiatives but also in facilities and equipment.
However, to truly understand the current landscape of semiconductor training in Vietnam, it is essential to look at the regulations and current state of training schemes in this field from 2024 backward.
Firstly, the high costs associated with establishing chip fabrication facilities make it an impractical investment for Vietnam. The country’s resources would be better allocated towards sectors that promise more immediate returns, such as ATP and IC design. Advanced packaging technologies represent a feasible and profitable entry point in the global semiconductor value chain, aligning with Vietnam’s strengths in low-cost, adaptable labour.
Vietnam should focus on drawing overseas funding into ATP operations, leveraging its lower labour costs to attract foreign companies. The availability of a high-quality but affordable workforce makes Vietnam an attractive destination for packaging, testing, and assembly processes. Prioritising such investment with advanced packaging capabilities will allow Vietnam to build a competitive advantage in this sector.
Meanwhile, the IC design segment represents a high-value opportunity with significant global demand. To capitalise on this, Vietnam should proactively seek partnerships and outsourced projects from international IC design firms. Engaging Vietnamese firms in IC design outsourcing allows for skill transfer, builds local capacity, and positions Vietnam as a reliable partner in the global semiconductor value chain.
Collaboration between industry, educators, and government should be boosted. Building a cohesive semiconductor workforce will require closer partnerships between educational institutions, industry players, and the government.
By integrating real-world projects into academic programmes, Vietnamese graduates will better understand the industry’s practical requirements and be more prepared to transition directly into the workforce. Schemes that bring industry projects to academia will provide students with hands-on experience, making them job-ready upon graduation.
At the same time, establishing specialised training for semiconductor roles, particularly in ATP and IC design, will be essential to reduce the industry’s current reliance on costly in-house training. This should involve upskilling engineers from related fields through short, intensive courses designed to meet industry standards.
Partnerships with international organisations for curriculum development, as well as accreditation for training initiatives, will help elevate Vietnam’s semiconductor workforce to global standards.
Vietnam can also implement “train-the-trainer” programmes. Its academic institutions face a shortage of faculty members with practical experience in semiconductor technologies. By leveraging international partnerships, Vietnam can upskill its instructors, who can then transfer these skills to future generations of engineers.
Notably, several US institutions have expressed willingness to offer training to Vietnamese trainers, a vital step towards creating a sustainable, locally driven semiconductor education ecosystem.
Finally, effective workforce development in the semiconductor industry requires government involvement in fostering a supportive ecosystem. Policies that incentivise partnerships between academia and industry, such as funding for research and development and joint training programmes, are critical.
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