Vietnam real estate market faces supply-demand imbalance and low liquidity

The Vietnamese real estate market is currently experiencing a significant mismatch between supply and demand, characterized by a surplus of high-end products and a critical shortage of affordable and social housing. Experts note that while there is high demand for residential property, transaction volumes remain low due to declining consumer confidence.

Many potential buyers are opting to hold capital in savings accounts or gold, anticipating that property prices may drop by 30% to 50%, a sentiment reminiscent of the 2011–2015 period. Meanwhile, investors using high financial leverage are facing pressure to sell assets to reduce debt burdens.

The Ho Chi Minh City Real Estate Association (HoREA) has warned of a ‘three decreases’ trend: falling prices, falling purchasing power, and falling total demand. While primary market prices from developers have seen modest decreases of around 5%, secondary market prices—where investors sell to cut losses—have seen deeper drops of 20% to 30%, yet often remain difficult to sell. This lack of liquidity and cash flow is placing significant strain on real estate enterprises.