Who Can Afford the $4,300 per Sq. Ft. Luxury Condo Market?

The latest report from the Ministry of Construction reveals that in the first nine months of the year, apartment prices in Hanoi and Ho Chi Minh City (HCMC) remained high and showed an upward trend compared to the same period last year.

Specifically, the average primary selling price of apartments in Hanoi during Q3/2025 ranged from 70 to 80 million VND per square meter, a 5.6% increase from Q1/2025 and a 33% surge compared to the same period in 2024. Notably, some luxury apartment projects in Hanoi recorded selling prices of 150 to 300 million VND per square meter.

In HCMC, the average primary selling price of apartments over the past nine months was approximately 75 million VND per square meter, unchanged from Q1 this year but up 36% compared to the same period in 2024. Some high-end projects listed prices starting from 150 million VND per square meter.

Savills’ latest report also indicates that the average price per square meter of newly launched apartments in Hanoi during Q2 reached 91 million VND. This price is expected to remain stable, at least for this year, as most upcoming projects are priced above 90 million VND per square meter.

The Ministry of Construction’s report emphasizes that while property prices have been rising annually, they do not accurately reflect the true value and remain high compared to the average income of most residents.

The Ministry also highlights persistent issues such as hoarding, price manipulation, and speculation. These practices drive up property prices, disrupt supply-demand balance, and exceed the affordability of most residents.

According to real estate experts, the majority of buyers in the high-priced segment are investors seeking high profit potential. In contrast, despite strong demand, most residents, especially young people, struggle to afford housing due to high prices.

Mr. Nguyễn Văn Đính, Chairman of the Real Estate Brokerage Association, analyzed: “In reality, only a small group are first-time buyers purchasing for actual living needs. The majority are investors, some aiming for short-term ‘flipping,’ while others seek to preserve assets amid volatile investment channels.”

A survey by DKRA Vietnam found that investors account for 70-80% of sales, mostly owning at least two properties and using idle funds rather than loans. They prioritize profit potential, clear legal status, rental feasibility, and liquidity.

Property Guru Vietnam’s survey revealed that 60% of recent apartment transactions were made by investors. These investors, comfortable with risk, leverage financial tools, confident that apartment prices will continue rising.

Besides profit-seeking investors, Ms. Phạm Thị Miền, Vice Director of the Vietnam Real Estate Market Assessment Institute (VARS IRE), identified another group: those with strong financial capabilities willing to buy apartments priced at 100 million VND per square meter.

Ms. Miền noted that despite high prices, developers still achieve sales. The absorption rate of new supply remains at 62%, with most sales in the high-end and luxury segments.

“Newly launched projects with high prices are well-absorbed due to strong demand from financially capable buyers, including both Vietnamese and foreign nationals. Additionally, investment demand has increased as buyers leverage ‘favorable’ funds, anticipating further price rises,” said Ms. Miền.

The expert added that most transactions in the primary market come from buyers owning multiple properties.

A representative from a Hanoi-based real estate company shared that for projects in prime locations priced at hundreds of millions per square meter, buyers are primarily wealthy individuals with genuine living needs. These are often 8X and 9X generation customers seeking fully-equipped living spaces and civilized communities.

“Apartments priced between 100 and 150 million VND per square meter are the easiest to sell, while those above 200 million VND per square meter are more selective,” he noted.

Peak Investment Risks

Mr. Nguyễn Quốc Hùng, Vice Chairman and Secretary-General of the Vietnam Banking Association, warned that investors holding multiple high-priced apartments, waiting for prices to rise before selling, face significant risks starting in 2025. According to Mr. Hùng, banks continue lending, investors keep buying, and subsequent buyers pay higher prices, expecting further increases. However, if prices fall or sales stall, the last buyer bears the consequences.

Mr. Hùng believes that with the government’s “1 Million Social Housing Units” scheme, the real estate market will return to its fundamentals.

Additionally, the 145,000 billion VND capital earmarked for social housing investors will open new opportunities for the real estate market.

Mr. Nguyễn Quang Huy, CEO of the Finance and Banking Department at Nguyen Trai University, warned that investing in apartments priced in the hundreds of millions carries high risks.

Specifically, this segment has limited liquidity due to a small buyer pool, making quick resale difficult. Rental yields for these apartments are modest, around 3–5% annually, lower than many other channels.

Meanwhile, the risk of price adjustments or stagnation is high. If prices exceed affordability and actual exploitation value, the market may witness a slowdown.

Finally, Mr. Huy noted that concentrating large amounts of capital in a single high-end apartment means missing diversification opportunities in other sectors.

Mr. Phạm Đức Toản, CEO of EZ Real Estate Investment and Development JSC, advised investors to focus on affordable apartments in the current market.

According to Mr. Toản, 2–3 years ago, apartments were rarely considered attractive investments due to the perception of being depreciating assets. However, with limited new supply in Hanoi, this product has regained interest from risk-averse investors. Combining rental income and price appreciation, apartment investments now offer better returns than savings accounts.

However, with current high prices, buyers risk “buying at the peak,” leading to significant risks. For example, a 4–5 billion VND apartment may only rent for around 10 million VND monthly, similar to a 2–3 billion VND apartment. Therefore, Mr. Toản recommends investing in reasonably priced products.

Mr. Nguyễn Quốc Anh, Deputy General Director of PropertyGuru Vietnam, also advised buying or investing in affordable, reasonably priced products. He emphasized that timing is less important than strong financial preparation. Buyers should have at least 30–40% of the property value in cash and ensure stable cash flow for the next 3–5 years to avoid financial pressure from loans.