APARTMENT AND LAND PRICES BEGIN TO ADJUST AFTER A PERIOD OF RAPID GROWTH

Secondary Apartment Prices Decline in Major Cities

The Ministry of Construction’s Q2 real estate market report shows that secondary apartment prices nationwide have begun to adjust following a period of rapid increases.

In Hanoi, the average secondary apartment price stood at approximately VND 123 million per square meter, down nearly 3.9% from Q1. In Ho Chi Minh City, the average secondary price was around VND 108 million per square meter, representing a decline of approximately 3.6%.

However, the adjustment has not significantly changed the overall price level in major urban markets. Some projects in Hanoi continue to be priced at around VND 80–140 million per square meter. In inner-city areas of Ho Chi Minh City, asking prices generally range from VND 70–120 million per square meter.

Data from market research firms including Savills, DKRA and Avison Young also indicate that secondary apartment prices have declined by approximately 5–8% from their peak levels.

Land Prices Also Come Under Pressure

The adjustment has extended beyond apartments to the land market.

According to the Ministry of Construction, secondary-market land prices nationwide fell by around 2–3% compared with the previous quarter. Average asking prices declined approximately 2.5% to around VND 40 million per square meter.

In Ho Chi Minh City, land prices decreased by nearly 3% to approximately VND 66 million per square meter. At some projects, price reductions of around 3–6% have become more common, particularly for high-value properties or assets facing greater liquidity pressure.

Other market reports have recorded secondary-market land price declines of around 8–10% from peak levels. Meanwhile, absorption rates remain relatively low, at below 30% for apartments and around 4–7% for land.

These developments suggest that buyers are becoming more cautious, particularly when considering high-value properties and investments that rely heavily on financial leverage.

Weaker Liquidity Puts Pressure on Prices

According to the Ministry of Construction, the current price adjustment is taking place amid weaker market liquidity, high financing costs and a shift in capital toward properties that serve genuine housing demand.

In Q2, Vietnam recorded more than 100,000 successful real estate transactions, down 28.5% from the previous quarter and 36.3% year on year.

Land accounted for the majority of transactions, with 73,438 successful deals, down 32.6% from Q1 and more than 40% from the same period last year. Meanwhile, transactions involving apartments and landed residential properties totaled 26,567 units, nearly 14% lower than in the previous quarter.

Weaker liquidity is creating greater pressure on short-term price growth, particularly in areas where property prices have risen rapidly in recent years.

Financing Costs Continue to Influence Homebuying Decisions

Another major factor affecting demand is the cost of borrowing.

The Ministry of Construction reported that mortgage rates for real estate purchases are currently around 12–14% per year. Once promotional periods expire, floating rates at some banks may rise to 13–15%, or even 15–16% per year.

Such borrowing costs are prompting buyers to reassess their debt-servicing capacity while reducing the appeal of highly leveraged property investments.

Against this backdrop, moderately priced properties with clear legal status and strong potential to meet actual housing needs are likely to attract greater interest than assets whose value depends primarily on future price appreciation.

The Market Moves Toward Greater Balance

The Ministry of Construction assesses that the real estate market remains on a recovery path, although performance varies significantly across regions and segments. The supply of social housing and reasonably priced homes remains limited, while some projects continue to face difficulties in completing legal procedures.

At the same time, high development costs and limited access to financing remain key challenges for both property developers and homebuyers.

The decline in apartment and land prices during Q2 can be viewed as part of the market’s transition following a period of rapid growth. Rather than simply pursuing higher prices, market participants are increasingly placing greater emphasis on legal transparency, infrastructure quality, income-generating potential and genuine housing demand.

Going forward, capital is likely to become increasingly selective, favoring projects with transparent legal frameworks, clear development timelines, well-connected infrastructure and pricing that remains within buyers’ affordability range.