Macro conditions open room for Vietnam's property market to enter new cycle: economist

Vietnam’s macroeconomic conditions are creating room for the property market to enter a new growth cycle, as legal reforms and public investment accelerate while financial risks remain largely contained, said Can Van Luc, chief economist at state-controlled BIDV bank.

Speaking at a Thursday forum on sustainable real estate development, Luc, also a member of the Prime Minister’s policy advisory council, said it is time to reassess the property sector’s real contribution to the economy and adopt more fundamental solutions on finance and pricing to ensure long-term sustainability.

Construction and real estate contributed about 9.46% of Vietnam’s GDP in 2024, easing slightly to 9.11% in the first nine months of 2025, he cited.

"Compared to many countries, the scale of Vietnam's market contribution remains at a low to medium level,” he noted. Real estate accounts for about 21% of GDP in China, more than 14% in the United States, and over 12% in the European Union, highlighting both growth potential and the need to improve the quality of expansion rather than pursue scale alone.

Luc described 2025-2026 as a pivotal period for reshaping the property market.

“Macroeconomic fundamentals are broadly supportive,” he said, citing solid economic growth, controlled inflation, exchange rates and bad debts, and interest rates that, while edging up, remain low by historical standards.

He added that institutional reforms, administrative streamlining, territorial reorganization, and faster public investment in infrastructure are laying an important foundation for the market to enter a new cycle.

A series of key legal measures has been issued or is being finalized to address long-standing bottlenecks, particularly in social housing development, land-use fee calculations, decentralization to local authorities, and easing financial pressure on businesses, the economist noted.

Initiatives such as the establishment of a national housing fund, tighter transparency in social housing transactions, and a roadmap to complete land, construction and investment laws are expected to significantly improve the market environment over the medium to long term.

However, Luc warned that housing prices have surged beyond sustainable levels, with the average household needing nearly 26 years of income to buy a home, well above the global average.

Between 2019 and 2024, property prices rose by nearly 60%, while apartment prices in Hanoi and Ho Chi Minh City climbed more than 20% on average in the first 11 months of 2025, he said.

Luc attributed high prices to prolonged legal obstacles constraining supply, rising input costs, a mismatch between supply and demand as developers focus on high-end segments, widespread speculation and price manipulation, and the absence of sufficiently strong property tax policies.

Also speaking at the forum, Deputy Construction Minister Nguyen Van Sinh said authorities are working to resolve bottlenecks at 2,991 property projects facing difficulties nationwide, including 898 subject to special review by government inspectors.

“These projects will gradually be unblocked, helping to increase supply and unlock resources for development,” he added.