Vietnam’s real estate market experienced significant regulatory and policy changes in 2024, aimed at boosting growth, transparency, and sustainability. These changes are expected to shape the market dynamics in 2025 and beyond.

Key Regulations and Policies

1. New Land Law, Housing Law, and Real Estate Business Law

Effective from 1 August 2024, these laws aim to create a more transparent and structured legal framework for the real estate market. They address inconsistencies and streamline regulations, making it easier for investors and developers to navigate the market.

2. Resolution 171/2024/QH15 dated 30 November 2024 – Pilot Scheme for Commercial Housing Projects

• • Resolution 171/2024/QH15 establishes a pilot scheme for executing commercial housing projects through agreements concerning land-use rights or current land rights. This initiative is designed to eliminate legal obstacles and facilitate a greater supply in the property market. Currently, Vietnam has around 500 projects facing land use right issues, with 148 of them in Ho Chi Minh City.
  • The pilot scheme allows developers to undertake commercial housing projects on non-residential lands by acquiring land use rights through voluntary agreements. This is a significant shift from previous regulations, which restricted such developments to residential lands only.
  • The scheme includes specific criteria for selecting pilot projects:
    • Projects must be situated in urban development areas to ensure they contribute to organized and sustainable urban growth.
    • The total residential land area utilized for these projects must not exceed 30% of the additional residential land area planned for the period from 2021 to 2030. This criterion ensures that the projects are kept within a manageable and sustainable scope.
    • Projects must comply with district-level land use planning and be part of the local housing development programs. This alignment ensures coherence and synergy with existing development plans and policies.
    • Projects must be included in a list approved by the provincial People’s Council, ensuring that they have undergone a thorough review and received the necessary endorsements at the local government level.
    • Special provisions exist for using defense or security land for pilot projects. These projects can only proceed if they adhere to specific conditions and obtain the necessary approvals from relevant authorities, ensuring national security concerns are addressed.
  • Land types: Real estate business organizations can implement pilot projects by acquiring land use rights for agricultural land, non-agricultural land other than residential land, and residential land combined with other land types, provided they meet specific conditions outlined in the resolution.
  • The government and relevant agencies are responsible for overseeing and detailing the resolution’s implementation, with periodic reviews and reports to ensure transparency, efficiency, and progress.
  • Resolution 171/2024/QH15 is effective from 1 April 2025, for a duration of five years. Upon expiration of the scheme, pilot projects may continue until completion, with land use rights and ownership of land-attached assets being governed by existing laws.

3. Transit-Oriented Development (TOD) Projects

• • TOD projects have gained momentum, focusing on integrating residential, commercial, and recreational spaces around public transportation hubs. These projects aim to reduce traffic congestion, promote sustainable urban development, and enhance the quality of life for residents.
  • Ho Chi Minh City’s First Metro Line: The opening of Ho Chi Minh City’s first metro line on 22 December 2024, marks a significant milestone in the city’s public transportation infrastructure. Spanning 19.7 km and connecting Ben Thanh Market in District 1 to Suoi Tien Theme Park in Thu Duc City, this metro line is expected to revolutionize urban mobility and ease congestion. The integration of TOD projects around this metro line will likely boost real estate development in these areas, making them more attractive for both residential and commercial investments.
  • Decision No. 1711/QD-TTg dated 31 December 2024: This Decision outlines the master plan for Ho Chi Minh City for the period 2021-2030, with a vision to 2050. It aims to develop the city into a global, civilized, and modern urban center. The plan emphasizes sustainable development, economic growth, and improved quality of life, aligning with the goals of TOD projects to create well-connected, livable urban spaces.

In the plan to develop the urban railway network, the city aims to create 12 urban railway lines associated with the development of urban areas following the TOD model, connecting satellite provinces in the Southeast such as Dong Nai, Binh Duong, Long An and industrial parks. The prioritized projects for implementation from 2021 to 2030 include Metro Lines 1 through 7, with a total preliminary investment of over 40.21 billion USD by 2035, and the network’s coverage expanding to 510 km by 2045:

• • • Metro Line 1 (40.8km): Starting point in Binh Chanh District – End point in Thu Duc City
    • Metro Line 2 (62.2km): Starting point in Thu Duc City – End point in Cu Chi District
    • Metro Line 3 (45.8km): Starting point in Binh Chanh District – End point in Thu Duc City
    • Metro Line 4 (47.3km): Starting point in Hoc Mon District – End point in Nha Be District
    • Metro Line 5 (53.9km): Starting point in Binh Chanh District – End point in Thu Duc City
    • Metro Line 6 (53.8km): Traveling mainly through Thru Duc City, District 7, Binh Chanh, inner city districts
    • Metro Line 7 (51.2km): Starting point in Binh Chanh District – End point in Thu Duc City

During the implementation period, public investment will play a key role, with the city exploring additional funding from investors for commercially viable metro lines. The projected investment for 2026-2030 is approximately USD 16.35 billion, with the city budget contributing USD 5.81 billion, the central budget supporting USD 3.86 billion, and other sources such as local government bonds and build-transfer capital accounting for the remainder. From 2031-2035, an investment of around USD 24 billion is required, with a significant portion sourced from the city budget and the central budget, supported by local government bonds and build-transfer capital.

4. Nationwide Land Inventory

Directive No. 22/CT-TTg dated 23 July 2024 of the Prime Minister: Starting from 1 August 2024, a nationwide land inventory was conducted to assess land management and propose measures to improve land use efficiency. This initiative supports economic activities and helps establish land use strategies for the coming years. The land inventory result will be finalized and published by 30 September 2025.

5. Affordable and Social Housing Initiatives

• • Resolution 33/NQ-CP dated 11 March 2023: The government has prioritized affordable and social housing projects, demonstrating a strategic commitment to meet the nation’s pressing housing needs. These initiatives are expected to provide relief to ongoing supply shortages and support the housing market’s recovery.
  • Official Letter No. 55/NHNN-TD dated 3 January 2025: The government has been urging commercial banks to expedite the disbursement of funds for social housing projects. The SBV issued Official Letter No. 55/NHNN-TD to nine commercial banks (Agribank, Vietcombank, VietinBank, BIDV, TPBank, Techcombank, VPBank, MB, and HDBank) regarding the implementation of the Loan Program for social housing, worker housing, and the renovation and reconstruction of old apartments in accordance with Resolution 33/NQ-CP. Under this policy, commercial banks do not need to count the outstanding loans of subjects within the Social Housing Loan Program against their annual credit growth targets set by the SBV. The policy is effective until 2030, with loan amount not exceeding VND 145,000 billion registered by the banks for the program.

6. ESG and Sustainable Development

• • The real estate sector in Vietnam is increasingly shaped by ESG legislations, showcasing the country’s dedication to sustainable development and ethical business practices. The Law on Environmental Protection 2020 mandates thorough environmental impact assessments for real estate projects to mitigate pollution and promote sustainability. Additionally, national standards on green building encourage energy efficiency, water conservation, and the use of sustainable materials in construction. Socially, the Labor Code ensures fair wages, safe working environments, and non-discriminatory practices, while the Land Law protects the rights of local communities during land acquisition processes. Governance is strengthened by the Law on Enterprises, which mandates transparency and accountability, and the Anti-Corruption Law, which enforces ethical practices in real estate businesses.
  • International commitments also influence Vietnam’s real estate sector. The Paris Agreement drives projects to reduce greenhouse gas emissions and enhance climate resilience, while the EU-Vietnam Free Trade Agreement (EVFTA) includes sustainable development provisions that promote environmental and labor standards, and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CP-TPP) further addressing the sustainable development. Compliance with these regulations not only mitigates risks but also enhances the long-term value and reputation of real estate developments. These ESG legislations collectively ensure that real estate projects contribute positively to environmental sustainability, social equity, and good governance in Vietnam.
  • Compliance with these regulations is monitored through regular audits and reporting requirements. Developers who meet or exceed these standards can benefit from incentives such as tax breaks and access to green financing options.

Outlook for 2025

1. Increased Transparency and Professionalism

The new legal frameworks are expected to enhance transparency and professionalism in the real estate market. This will likely attract more foreign and domestic investors, boosting market confidence and stability.

2. Increase in M&A Transactions

Resolution 171/2024/QH15 is set to warm up the market for real estate M&A transactions, giving investors more access to eligible projects.

3. Growth in TOD Projects

More TOD projects are expected to be developed, promoting sustainable urban growth and improving connectivity within cities. These projects will likely become a key focus for developers and urban planners.

4. Expansion of Affordable Housing

The emphasis on affordable and social housing will continue, with more projects being launched to address the housing needs of the growing population. This segment is expected to see significant growth, supported by government incentives and policies.

5. Technological Integration

Real estate companies are likely to adopt advanced technologies to enhance customer engagement and streamline operations. This includes the use of digital platforms for property transactions, virtual tours, and data analytics to better understand market trends.

6. Sustainable Development

Sustainability will remain a central theme, with developers focusing on green building practices and energy-efficient designs. This aligns with global trends and Vietnam’s commitment to environmental protection.

In conclusion, 2025 looks promising for Vietnam’s real estate market. With new regulations, pilot projects, and a focus on sustainability, the market is set to become more dynamic and attractive, offering numerous opportunities for investors and developers.