Vietnam property market set for supply rebound, limiting price upside: VinaCapital

Home prices in Vietnam rose more than 30 percent in 2025 and are up over 50 percent since 2023, driven largely by a prolonged lack of new supply as projects were stalled by planning bottlenecks and approval delays, VinaCapital said in its 2026 outlook.

New housing supply in recent years has met less than half of actual demand, the firm said.

Unlike a typical property cycle where prices and supply rise in tandem, Vietnam saw prices surge after years of constrained supply, while new project launches lagged behind.

VinaCapital said that dynamic is now shifting.

Legal reforms related to land clearance and land-use conversion could allow up to 80 percent of previously stalled projects to become construction-ready, significantly expanding supply over the next two years.

As a result, the firm said 2026–27 is unlikely to mark a fresh upcycle in prices, but rather a period of market normalization as accumulated pressure is released.

Primary market prices could see a mild correction in 2026 after last year’s sharp gains.

Higher borrowing costs are also expected to curb speculative demand.

Mortgage rates rose by about one percentage point in 2025 to around 11 percent by year-end, a level VinaCapital said remains manageable for end-users but discourages short-term investors.

Vietnam’s government has identified consumption, infrastructure development, and real estate as key growth drivers for 2026.

Public investment disbursement accelerated in 2025 and is expected to rise 20–30 percent this year, with infrastructure spending targeted to increase from about six percent of gross domestic product to 10 percent.

VinaCapital said the infrastructure push and legal reforms would mainly support supply expansion and improve market absorption, rather than spark another rapid price rally.

The firm noted Vietnam’s property market differs from China’s pre-2020 downturn, citing low vacancy rates and tighter credit controls.

Presales at listed property developers doubled in 2025, laying the groundwork for stronger profit recognition in 2026.

However, gains are expected to be uneven.

Developers with clear legal land banks and well-located projects are likely to benefit most, while overpriced or lower-quality developments are already seeing transactions slow sharply as buyers become more cautious.