HOW IS VIETNAM’S REAL ESTATE MARKET BEING RESTRUCTURED AS CAPITAL FLOWS HAVE BEEN UNLOCKED BUT EFFECTIVE DEMAND REMAINS A MAJOR CHALLENGE?

1. Where is the restructuring of Vietnam’s real estate market taking place?

As 2026 draws to a close, policy directions established through the Government’s management of the housing and real estate markets since 2024 are being translated into increasingly concrete measures. Since the first meeting of the Central Steering Committee on Housing Policy and the Real Estate Market in November 2024, chaired by Standing Deputy Prime Minister Nguyen Hoa Binh, the principle of developing housing based on actual social demand, while controlling speculation and minimizing the waste of resources, has increasingly become a consistent direction of market policy.

The current market landscape is characterized by two parallel developments:

A nationwide campaign to resolve long-standing project bottlenecks: Special mechanisms and policies are being implemented to address legal obstacles affecting stalled real estate projects, thereby unlocking land resources and investment capital that have remained tied up for years. According to information cited by several media outlets and real estate forums, the resources requiring mobilization could amount to more than VND 2.5 quadrillion. However, this figure should be understood as an estimate reported by secondary sources and should not automatically be treated as an official or comprehensive government statistic. In Ho Chi Minh City and other localities, authorities are accelerating the review and classification of projects facing difficulties within their respective jurisdictions in order to determine appropriate solutions.

A strategy to rebalance the national housing supply structure: The Government is promoting the development of social housing (SOH) and rental housing for the 2026–2030 period, with the aim of creating a supply structure that is better aligned with actual market demand. At the same time, the preferential credit program under Resolution No. 33/NQ-CP has been expanded from its initial VND 120 trillion to more than VND 153 trillion, with 11 commercial banks participating. However, an increase in available funding does not necessarily translate into a corresponding increase in disbursement. The gap between commercial housing prices and household incomes, together with constraints related to project supply, implementation progress, and borrowing eligibility, remains a major obstacle to the market’s ability to absorb available credit.

2. What figures are reshaping the real estate landscape?

• VND 2.5 quadrillion: The estimated total value of capital and land assets being targeted for release from stalled and long-delayed projects nationwide (Vietnam Financial Times).

• 1,338 projects covering more than 30,691 hectares: According to a report by the Ho Chi Minh City People’s Committee, as of September 5, 2026, the city had identified 1,338 projects facing prolonged difficulties and unresolved issues, covering more than 30,691 hectares and representing approximately VND 658.084 trillion in total investment. These projects are being reviewed and registered on a management system to classify the nature of their obstacles and determine appropriate solutions within the relevant authorities’ jurisdictions. According to information published in September 2026, the city had resolved difficulties affecting 650 projects. (Sources: VOV, VnEconomy, Vietnam Financial Times.)

• 899,857 housing units: Under Government Resolution No. 303/NQ-CP dated September 30, 2026, the total target for the development of social housing and rental housing allocated to localities for the 2026–2030 period is 899,857 units. Of this total, 708,834 units are designated as social housing for sale or rent-to-own, while 191,023 units are designated as rental housing. The resolution builds on the Government’s scheme, approved under Decision No. 338/QD-TTg, to develop at least one million social housing apartments during 2021–2030.

• 181,257 units: The social and rental housing target assigned specifically to Ho Chi Minh City through 2030. The city has set a roadmap to complete 9,000 units in 2026, 57,657 units in 2027, and 38,200 units annually from 2028 to 2030. (VnEconomy.)

• More than VND 153 trillion: The size of the preferential credit program for social housing development under Resolution No. 33/NQ-CP, up from the initial VND 120 trillion implemented by four state-owned commercial banks to more than VND 153 trillion with the participation of 11 commercial banks. According to information released by the State Bank of Vietnam and reported by the Government News on October 7, 2026, lending rates currently stand at 6.5% per year for homebuyers and 7% per year for developers. The preferential interest-rate period is five years for homebuyers and three years for developers. These rates reflect the levels announced at the time and should not be interpreted as fixed rates throughout the entire program. (VTV, Government News.)

• 46,962 social housing units: According to data released by the Ministry of Construction at the October 2026 meeting of the Central Steering Committee on Housing Policy and the Real Estate Market, 46,962 social housing units were completed nationwide during the first nine months of the year. For rental housing alone, 8,314 units had been completed by the end of Q3 2026, equivalent to 48% of the annual target for this segment. These figures indicate that social housing development continues to accelerate, while expanding the supply of rental housing remains an important priority in meeting people’s housing needs. (Nhan Dan.)

3. How are the rules of the real estate market changing?

The market is undergoing three fundamental shifts in the way it operates:

• From “resolving individual cases” to “standardizing data at scale”: Previously, legal bottlenecks were often handled reactively, with each project submitting requests and petitions to multiple departments and agencies. Today, local authorities and ministries are establishing digital databases and requiring developers to register directly so that obstacles can be accurately classified according to the level of authority responsible—whether the Government, a ministry, or a provincial/city government. This creates a clearer framework for assigning and monitoring administrative responsibility.

• From “chasing high-end apartments” to “mandatory product-mix restructuring”: The investment model driven by herd behavior and focused on high-end housing to maximize short-term returns has reached the limits of its liquidity. The Government has made it clear that the housing product mix must be brought back in line with actual household incomes. Rental housing is no longer viewed merely as a supplementary solution, but as a strategic long-term segment.

• From “credit-room constraints” to “absorption constraints”: Bank funding is no longer the primary shortage; the preferential social housing credit program has repeatedly expanded its funding capacity and participating banks. The current bottleneck lies in the legal conditions required for project disbursement, the gap between preferential interest rates—which apply only for a limited period—and borrowers’ long-term repayment capacity, as well as administrative barriers in verifying eligible beneficiaries.

4. How should property developers change their strategies?

From a developer’s perspective, the policy and market shifts described above have a direct impact across the entire investment value chain.

4.1. Market conditions and absorption capacity

Market data indicate that commercial housing prices in major urban centers remain significantly above the accumulated purchasing power of most households. A form of “transaction freeze” is occurring in projects that are overpriced while offering insufficient utility value. By contrast, projects priced close to genuine demand, as well as well-designed and properly implemented social housing projects, are attracting record levels of interest. Today, absorption capacity is no longer primarily determined by sales and marketing campaigns. It depends on whether a project has sufficient legal status to qualify for credit financing and whether its pricing is compatible with the income profile of its target customers.

4.2. Planning and site selection

The Government’s policy direction prioritizes social housing and rental housing models linked to transit-oriented development (TOD), industrial parks, economic zones, and interregional economic corridors. Developers can no longer simply search for inexpensive land in isolated locations with poor transport connectivity. A social housing or mid-market residential project can only achieve sustainable liquidity when it provides convenient access to workplaces, schools, hospitals, and other essential services.

4.3. Legal status and registration procedures

The establishment of databases for stalled projects provides developers with an opportunity to conduct a comprehensive “legal health check” of their projects. At the same time, it serves as a test of corporate transparency. Developers must clearly identify the source of each bottleneck—whether it relates to land-use fees, inconsistencies between the 1/500 detailed master plan and the broader planning framework, or obligations relating to the 20% social housing requirement. If developers fail to proactively standardize their documentation and update it through public administrative systems, they face a higher risk of being classified as projects with prolonged unresolved issues and becoming subject to enhanced regulatory monitoring.

4.4. Financial structure and cash flow

The development model based on extreme financial leverage—such as 80–90% debt financing combined with large-scale presales—has run its course. The expansion of the social housing credit program to more than VND 153 trillion, with 11 commercial banks participating, demonstrates that “smart capital” is increasingly directed toward projects with clean legal status and genuine implementation capacity. For rental housing, which accounts for more than 191,000 units in the national target, developers need to rethink their financial structures: shifting from a model focused on rapid capital recovery and capital gains toward an asset-management model that generates stable long-term operating cash flows, potentially combined with refinancing.

5. What are the most important strategic insights?

Based on a synthesis of data from government authorities and financial and real estate media, four core insights should be recognized by developers and investors:

• “Removing legal bottlenecks” only unlocks potential supply; it does not automatically create immediate liquidity. The evidence includes Ho Chi Minh City’s 1,338 projects facing difficulties, covering more than 30,691 hectares, as well as the estimated VND 2.5 quadrillion in resources tied up nationwide. Although more than 650–700 projects have reportedly received initial solutions to their difficulties, the market has not yet experienced a corresponding surge in commercial housing supply. The reason is that, once legal issues are resolved, projects still have to deal with land valuation, additional financial obligations under new land-price frameworks, and the need to test whether development costs are compatible with actual market purchasing power.

• The credit paradox: funding has expanded, but access remains difficult. The preferential credit program for social housing has grown to more than VND 153 trillion, with 11 participating commercial banks. During the first nine months of 2026, 46,962 social housing units were completed nationwide, while 8,314 rental housing units were completed—equivalent to 48% of the annual target for the rental segment. These two indicators reflect the scale of social housing implementation and the progress of rental housing development, respectively. They do not mean that the overall program has achieved 48% of its target. The gap between the scale of available funding and the pace of housing development demonstrates that the challenge is not simply the size of the credit facility. It also lies in the ability to channel capital into eligible projects that meet actual market demand. Developers may face obstacles relating to project legality, lending conditions, and collateral requirements. Meanwhile, social housing buyers must meet eligibility requirements relating to their status, income, and borrowing conditions. In addition, the preferential interest-rate period and the applicable rate after the preferential period are important factors that borrowers must consider. (Government News.)

• Rental housing is being elevated within the national housing strategy for 2026–2030. Under Resolution No. 303/NQ-CP dated September 30, 2026, the Government has assigned localities a combined target of 899,857 social and rental housing units for 2026–2030, including 191,023 rental units. This signals that rental housing is receiving increasing policy attention. Over the long term, this direction could encourage greater diversification of development models—from selling residential products to investing in and operating rental housing as a long-term income-generating asset. For companies entering this segment, asset management, property operations, and operating-efficiency management will become increasingly important. However, it should not be stated that all real estate companies are required to increase the proportion of rental units in their portfolios unless specific regulations applicable to each project type or developer are introduced.

• Digital data-driven monitoring and approval mechanisms are becoming increasingly important in social housing. Government efforts to combat speculation, minimize resource waste, and improve transparency in determining eligible social housing beneficiaries are creating stronger incentives to use population databases and electronic identification systems, including VNeID. The integration and cross-checking of digital data can improve the accuracy of information verification, reduce the risk of forged applications and policy abuse, and support the proper identification of eligible beneficiaries. Over the long term, such mechanisms could enhance transparency in the affordable housing segment and reinforce the development of products based on genuine housing demand, rather than excessive dependence on speculative expectations in the secondary market.

6. How will Vietnam’s real estate market evolve during 2026–2035?

The policy changes and restructuring of capital flows taking place in 2026 are reshaping the rules of the game for Vietnam’s real estate market over the 2026–2035 cycle.

• Stricter screening of developer capabilities: New management mechanisms based on digitalized project databases are likely to filter out developers whose business models rely primarily on securing projects, transferring them, or holding land for future appreciation. Long-term competitive advantages will increasingly belong to organizations with strong legal-completion capabilities, reliable construction and project-delivery capacity, and healthy balance sheets.

• Restructuring of industry-wide profit margins: The era of pursuing extraordinary margins of 30–50% through the acquisition of agricultural land and waiting for land prices to appreciate is coming to an end as land-price frameworks move closer to market values and anti-speculation measures are strengthened. The real estate industry is likely to gradually move toward more standardized and stable profit margins, potentially in the range of 10–15%, operating more like an infrastructure, urban-utility, or service industry than a speculative land-trading business.

• The development of specialized real estate financing institutions: To support the development of approximately 191,000 rental housing units and unlock capital currently tied up in the market, Vietnam will need to continue diversifying long-term funding channels. The development of effective real estate investment funds, the exploration of local housing-fund models, and greater transparency and credit-rating coverage for project-related bonds could help reduce the sector’s dependence on bank credit while creating additional sources of capital for long-term real estate investment and operations.

Conclusion: Vietnam’s Real Estate Market Is Entering an Era of “Real Value”

Vietnam’s real estate market is undergoing a fundamental restructuring. The Government is simultaneously removing legal bottlenecks to unlock trillions of dong in dormant resources and tightening development discipline around the principle of meeting genuine housing demand. For property developers, the era of relying on short-term speculative waves is coming to an end. Long-term survival and prosperity over the next decade will depend on one core capability: creating products with transparent legal status, reasonable costs, pricing that matches people’s actual purchasing power, and sustainable operating cash flows. In the new cycle, capital is no longer the only scarce resource. The real competitive advantage will be the ability to convert capital into housing that people can actually afford—and into assets capable of generating sustainable long-term value.