Vietnam Property Investment 2025: What Foreign and Local Investors Must Know Before Buying

Why both local and international investors need to look beyond the boom to understand the real challenges ahead

By Rachel Tan | Pulse of the Region

Vietnam's property market has captured global headlines with its spectacular price rises and foreign investment surge, but beneath the excitement lies a complex landscape of regulatory hurdles, market imbalances, and evolving rules that both local and international investors must navigate carefully.

The International Investor's New Reality

For foreign individuals, foreign-invested enterprises, and overseas Vietnamese (who now enjoy enhanced rights), Vietnam's property market offers genuine opportunities but within distinct parameters. The 30% ownership cap in condominiums and 10% limit on landed properties in any project, combined with the inability to own land outright, creates a structured but restricted investment environment.

The new 2025 Housing Law clarifies these restrictions while maintaining existing caps, and notably introduces tenure limits tied to Investment Registration Certificates for foreign organizations. A key liberalization allows foreigners to buy and sell directly from other foreigners, streamlining secondary market transactions. However, if foreign investors already own the maximum 250 houses allowed in an area, they cannot acquire additional properties in other projects within the same administrative ward—a rule that could significantly limit portfolio expansion strategies.

Procedural Challenges Persist

The procedural landscape continues evolving as Vietnam enhances its regulatory framework. While administrative processes require patience and thorough documentation, the government's ongoing digital transformation initiatives are streamlining procedures for investors. Property listings across multiple platforms sometimes show price variations, making comprehensive market research and independent legal verification valuable for informed decision-making.

Local Investors Face Their Own Headwinds

Vietnamese investors aren't immune to challenges. Market analysts note that despite strong growth, 70% of new residential supply caters to high-end buyers, creating a supply-demand imbalance that affects the broader market. This luxury focus means local investors seeking affordable properties or targeting middle-income renters face limited options and intense competition.

The regulatory environment affects domestic investors as they navigate Vietnam's evolving legal framework. As the government continues modernizing regulations across key sectors, investors benefit from ongoing reforms aimed at improving market efficiency. The 2024 Land Law introduces more targeted lump-sum rental schemes for specific project types, reflecting the government's strategic approach to sustainable development financing.

Banking and Financing Realities

Access to capital remains challenging across investor categories. Vietnam's government is strengthening banking regulations to create a more stable financial system, which affects lending practices for property buyers. For international investors, obtaining local bank financing can prove difficult due to restrictive policies for non-residents, while money transfers for property purchases are complicated by banking regulations.

Market Structure Concerns

The market's rapid growth masks structural issues that affect all investor types. Ho Chi Minh City's apartment prices dropped 2.5% year-over-year in Q3 2024 to $3,148 per square meter, with apartment sales declining 4% annually as demand softened. This price recalibration suggests the market may be reaching natural limits in certain segments. By contrast, Hanoi's market continues growing with apartment prices rising 22.3% year-over-year, illustrating the importance of regional market knowledge and local conditions.