Written by Dustin Trung Nguyen, Head of IQI Vietnam

• Segment 5-10 billion VND: Demand in Ho Chi Minh City is almost twice as high as in Hanoi.
• Segment 1-3 billion VND: Ho Chi Minh City leads, reflecting the strong appeal of affordable housing in the
  Southern market.
• Segment 2-3 billion VND: Hanoi dominates, thanks to apartment developments that align with the financial
  capabilities of most buyers.

Types of Real Estate in Demand

• Ho Chi Minh City: Private houses are the most sought-after, particularly in areas such as An Phu (District 2), Phu Huu (District 9), Thao Dien (District 2), and District 7.
• Hanoi: Apartments lead in search demand, notably in Nam Tu Liem (Tay Mo), Cau Giay (Trung Hoa), and satellite areas such as Gia Lam, Hoang Mai, and Ha Dong.
• Neighboring Provinces: Land for sale dominates, catering to investment needs and suburban infrastructure development.

Rental Market: A Consistent Trend
The rental real estate market remains stable across regions. The most in-demand rental properties include apartments, boarding houses, rented rooms, and private houses, reflecting steady demand among residents and workers.

Project Supply & Market Recovery
Slight Recovery from Late 2024
After a prolonged stagnation, real estate supply has begun to recover:

• Hanoi: Nearly 10 new projects were launched, including Lumi Hanoi, Imperia Sola Park, The Ninety Complex, Vinhomes Co Loa, and Grand Sunlake.
• Ho Chi Minh City: The market gained momentum towards the end of the year, with new developments such as Eaton Park, The Opus One, Fiato Uptown, Lavida Plus, Khai Hoan Prime, and King Crown Infinity

Market Overview and Forecast
In 2023, total market supply hit its lowest level in the past decade. However, from Q3 2024 onwards, new projects have re-entered the market, particularly in HCMC, which is experiencing a stronger recovery than Hanoi. With stable demand in the mid-range and high-end price segments, along with a resurgence in supply, the Vietnamese real estate market is expected to grow significantly in 2025, particularly in Ho Chi Minh City.The real estate revival in 2024 was fueled by growing homeownership demand and notable infrastructure improvements. These factors have accelerated transactions and investment activities, further strengthening the market.

Commercial Market
Challenges in Hanoi’s Shophouse Market
Many shophouses in downtown Hanoi are being left vacant as shop owners struggle to stay afloat amid an e-commerce boom.

Case Study:
Thu Phuong, a store owner in Hanoi, recently vacated her 70-square-meter fashion store in Cau Giay District, after closing two other outlets earlier in the year.

• While revenue from her three stores once covered rent costs, declining sales forced her to terminate lease agreements.
• She is now shifting her business focus to online sales and looking for a smaller, lower-rent location in side
  alleys.

Declining Retail Demand & Rising Vacancies
The capital’s once-bustling fashion and restaurant streets are now lined with vacant storefronts, as landlords struggle to find tenants.

• Kim Ma Street: Over 40 stores have closed.
• Nguyen Thai Hoc Street: Faces a similar downturn, with an increasing number of empty commercial spaces

Market Insights:
Duc Huy, a property broker with five years of experience, estimates that shophouse vacancies have risen by
15-20% compared to last year.

A five-story property on Kim Ma Street has remained vacant since August, even after landlords lowered rents by 10% from two years ago to VND 50 million (US$1,960) per month.

“A few years ago, landlords demanded high rents, and tenants were willing to pay. That is no longer the case.” –Duc Huy, Property Broker

Changing Consumer Behavior & Investment Challenges
Nguyen Chi Thanh, Vice Chairman of the Vietnam Association of Realtors, highlights that the shophouse segment is facing major challenges, as customers increasingly prefer shopping malls or online
– Instead of investing in high-rent retail locations, businesses are shifting budgets toward online marketing,
which attracts more customers.

Key Drawbacks of Hanoi’s Shophouse Market:
Limited Parking Spaces: Compared to shopping malls, most shophouses lack sufficient parking, making them
less convenient for consumers.Declining Rental Profitability: According to Dinh Minh Tuan, Business Director at Batdongsan, shophouse rental yields remain at around 3% annually—unchanged since 2021.