Luxury Condos Face Oversupply Risk Starting 2026

Over the past few months, a complex of seven towers in Van Giang, Hung Yen, has received bookings for over 2,000 units at a rumored market price of approximately VND 60 million per square meter. These units account for just over 16% of the total supply of apartments available for sale in the project, which stands at around 12,000 units.

During the initial launch, the developer increased prices by VND 10-15 million per square meter compared to the rumored rate. Buyers are required to pay from VND 2.5 billion for a one-bedroom unit with an area of 38 square meters (including VAT, excluding maintenance fees). For two-bedroom units, prices can exceed VND 3.4 billion.

This project, along with subdivisions in Ocean Park 2 and 3 (near the Hanoi – Hai Phong Expressway), is expected to supply tens of thousands of apartments to the eastern area of Hanoi. In mid-November, MIK Group also announced plans to develop 70 residential buildings in this area, offering 35,000 units.

Similarly, another high-end real estate developer will construct 34 residential buildings in two major urban areas east of Hanoi. Of these, 15 buildings are expected to commence construction next year and be handed over by 2027. The total supply from this project could reach tens of thousands of units.

According to One Housing, a market research firm backed by Techcombank and Masterise, Hanoi may welcome 35,000 new apartments in 2026. However, all these units belong to the high-end and luxury segments, primarily from major developers such as Masterise Homes, Sunshine, and MIK.

CBRE, a real estate services firm, reports that approximately 11,100 new apartments will enter the Hanoi market in Q4, bringing the total new supply for 2025 to over 32,300 units. Over the next two years, the firm forecasts that the capital city could see more than 33,000 new apartments annually.

The abundant supply of apartments, driven by developers expanding their project scales, has accelerated sales launches. Many projects are being introduced to the market immediately after obtaining sales permits, rather than waiting until construction is nearly complete. “The advance payments from buyers help developers improve cash flow and supplement working capital for new projects,” CBRE noted.

According to Savills, a real estate consulting firm, one of the market’s primary drivers is the resolution of legal hurdles for numerous commercial projects. Additionally, the “wave” of social housing is gaining momentum, while the renovation of old apartment buildings has begun to take shape.

However, many experts warn of potential “oversupply” as most new units belong to the high-end and luxury segments. The supply is trending back toward the peak levels of 33,000-37,000 units per year seen during 2015-2019. Nevertheless, CBRE data shows that the average secondary market price for apartments in Hanoi reached VND 91 million per square meter by the end of Q3. This figure is three times higher than the average apartment price a decade ago.

Vo Huynh Tuan Kiet, Director of Residential Markets at CBRE Vietnam, predicts that the market may enter a state of saturation as prices remain high, far exceeding the purchasing power of the majority. “Sellers are reluctant to reduce prices, while buyers are cautious about risks, leading to weakened liquidity,” Kiet stated.

He drew parallels to the 2007-2011 period when domestic real estate prices rose too quickly, credit tightened, and transactions nearly froze, warning of similar risks in the current phase.

Echoing this sentiment, Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokerage Association (VARS), noted that the market’s greatest demand lies in the affordable housing segment. However, over the past three years, the majority of new supply has consisted of high-end properties with large values, catering to investment and speculative needs. According to VARS data, in the first nine months of the year, 42% of Hanoi’s total supply came from apartments priced between VND 80-200 million per square meter.

Even in suburban areas—expected to provide affordable housing—actual prices are increasingly expensive, only slightly lower than those in central areas. Meanwhile, budget-friendly apartments, the most anticipated type, account for just 3% of new launches, primarily consisting of social housing. This means that low-cost commercial housing has nearly disappeared.

Regarding solutions, Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association (HoREA), suggested that alongside social housing, the government should introduce mechanisms to encourage the development of affordable commercial housing and support young people in purchasing their first homes. “If affordable housing becomes the market’s focal point, the real estate sector will have hope of balancing investment and actual living needs, ensuring social equity and stability,” he said.

Chau proposed expanding the VND 145 trillion preferential loan package—currently reserved for social housing—to include buyers of homes priced under VND 3 billion. He believes that young people’s access to housing will improve with reasonable credit policies, offering interest rates of 5.9-6.1% per year over 20-25 year terms.

In response to these challenges, a representative from the Ministry of Construction stated the need to adjust land use fees reasonably and implement mechanisms to promote housing segments priced appropriately for the majority of the population. The ministry is currently finalizing a pilot project for a state-managed Real Estate Transaction Center to enhance market transparency.