Vietnam's residential property market has become two-tiered, with apartment prices in Hanoi experiencing significant increases, while prices in Ho Chi Minh City are now declining.

Table of Contents

• Housing Market Snapshot
• Demand Highlights
• Supply Highlights
• Historic Perspective
• Rental Market
• Mortgage Market
• Socio-Economic Context

Housing Market Snapshot

In Hanoi, the country's capital city, the average price of apartments rose by a whopping 22.3% (19.1% inflation-adjusted) to US$2,547 per square meter (sqm) in Q3 2024 from a year earlier, more than double the year-on-year increase of 9.5% recorded in Q3 2023, based on figures released by JLL Vietnam.

Quarter-on-quarter, Hanoi apartment prices increased by 3.1% in Q3 2024 (2.3% inflation-adjusted).

Demand is surging in the capital city. In Q3 2024, the total number of apartment sales reached 6,840 units, up by 35% from the previous quarter and by a huge 226% from the same period in the prior year.

The recent strong growth in Hanoi's housing market can be largely credited to the new housing and land reform laws, which have boosted homebuyer interest in the capital city.

"Throughout 2024, Ha Noi housing market saw strong buyer interest, particularly in the for-sale apartment segment," said Savills Vietnam. "The recovery momentum continued in Q2 and Q3/2024. Notably, this period also saw the early implementation of real estate-related laws, including the 2024 Land Law, the 2024 Housing Law, and the Law on Real Estate Business, further reinforcing investor confidence in the real estate sector."

Ho Chi Minh City (HCMC), in contrast, is currently experiencing a slowdown, with its apartment prices falling by 2.5% (-5% inflation-adjusted) in Q3 2024 from a year earlier, to an average of US$3,148 per sqm. This followed a 5.3% y-o-y decline in Q3 2023.

Quarterly, apartment prices in HCMC were down by 1.4% (-2.2% inflation-adjusted) during the latest quarter.

The decline in prices can be attributed to falling demand. In Q3 2024, the number of apartments sold dropped 4% y-o-y to 1,915 units. Quarter-on-quarter, sales were down by 16%.

Vietnam's house price annual change

Though, the HCMC housing market is projected to improve in the coming months, as the new Land Price Framework takes effect.

"At the end of 2024, Ho Chi Minh City officially introduced a new land price framework, marking a significant milestone with increases ranging from 4 to 38 times. This adjustment aims to enhance transparency and align with market values," noted Savills Vietnam.

"By adjusting land prices to reflect actual market values, the new framework builds greater trust among foreign investors. This is a necessary step to ensure the sustainable development of the market," said Ms. Giang Do, Director of Advisory Services, at Savills Viet Nam.

Vietnam opened up to foreigners a decade ago. Foreign residents in Vietnam are now permitted to purchase dwelling houses and can own the house but not the land on which it is built. Despite this development, many potential foreign homebuyers are still discouraged from investing in Vietnam because of its inconsistent laws and complex regulatory framework, especially for foreigners looking to buy property in the country.

The outlook is positive for Vietnam's real estate market. Hanoi is expected to continue growing strongly while HCMC is projected to recover in the coming years, buoyed by robust economic growth and an improved legal framework.

"Together with three important laws - the Land Law, the Housing Law, and the Real Estate Business Law - taking effect from August, it will create a legal corridor and a favorable premise for the next market period. Therefore, 2025 is considered the first year of a new development cycle," said Kiet Vo of CBRE Vietnam.

During 2024, Vietnam's economy grew robustly by 7.09%, mainly driven by strong exports and foreign investment inflows. It was an acceleration from the real GDP growth rate of 5.05% in 2023 and 8.02% in 2022.

The International Monetary Fund (IMF) expects the Vietnamese economy to grow by a robust 6.1% this year and by another 6% in 2026. The World Bank is even more optimistic, projecting a real GDP growth rate for Vietnam of 6.6% in 2025.

Oxford Economics' economic forecast for Vietnam is also closely aligned, projecting a real GDP growth of 6.5% this year. "Vietnam's economy has been the region's outperformer in 2024," said Oxford Economics. "In 2025, we think Vietnam will continue to outperform its peers, growing by 6.5%."

Demand Highlights:

Property sales surging

Residential property demand in Vietnam remains strong, amidst declining interest rates, strong foreign investments, and robust overall economic growth.

Accordingly, the market saw more than 47,000 property transactions in 2024, achieving an absorption rate of 72%. Condominiums accounted for about three-fourths of total transactions.

"As the year progressed, the volume of such transfers increased due to improved supply conditions," said Nguyen Van Dinh, Chairman of the Vietnam Association of Realtors in his article published in Hanoi Times.

The total number of real estate businesses resuming operations exceeded 3,227 in 2024, a strong growth of 42.2% from the previous year.

In Hanoi:

• For apartments, total sales soared by a whopping 226% y-o-y to 6,840 units in Q3 2024, according to Savills. Quarter-on-quarter, apartment sales were up by 35%. Grade B apartments accounted for 98% of sales. New inventory made up 65% of total sales and reached a market absorption rate of 85%.
• For villas and townhouses, there were 326 units sold in Q3 2024 - up by a huge 194% from the previous quarter and by a whopping 223% from the same period last year. The market absorption rate increased to 48%.

For foreign homebuyers, the three most popular projects were Hai Dang City (Mon City), Imperia Smart City Tay Mo, and Golden Palace A.

Conversely, property transactions in Ho Chi Minh City present a mixed trend, with apartment sales declining while villa and townhouse sales are on the rise.

In HCMC:

• Apartment sales fell by 4% y-o-y to 1,915 units in Q3 2024, according to Savills. Quarter-on-quarter, sales were down by 16%. The market absorption rate stood at 39% - down by 2 percentage points from the previous quarter but up by 13 percentage points from a year ago.
• Sales of villas and townhouses rose sharply by 140% q-o-q and by 170% y-o-y to 173 units in Q3 2024. The absorption rate was 23%, up by 12 percentage points from the previous quarter and by 14 percentage points from a year earlier.

"Robust demand remains for affordable products; however sentiment towards higher-end properties remains cautious," said Giang Huynh of Savills HCMC.

Supply Highlights:

Apartment supply increasing in Hanoi but falling in HCMC

In Hanoi, there were 5,265 new supply of apartments in Q3 2024, up by a huge 95% from the previous quarter and by 178% from a year earlier, based on figures from Savills. Lumi Ha Noi and QMS Top Tower contributed 3,488 units, equivalent to about two-thirds of the new supply.

The primary stock of apartments in the capital city stood at 10,497 units in Q3 2024, up by 2% q-o-q but still down by a huge 47% y-o-y.

An additional 9,700 units were estimated to have been delivered to the market in Q4 2024.

From 2025 onwards, about 110,000 units from 106 projects will enter the market, with Grade B apartments contributing the largest share of 54% of future supply, according to Savills. Dong Anh, Hoai Duc, Gia Lam, and Hoang Mai will account for 62% of the share.

In HCMC, on the other hand, new apartment supply plunged by 30% q-o-q to 799 units in Q3 2024. This was mainly due to delayed launches in some projects and the temporary halt of sales in other projects due to incomplete legal requirements or sale policy adjustments.

HCMC had a total primary stock of 4,871 units in Q3 2024, down by 13% from the previous quarter and by 36% from a year ago. The East (Thu Duc City) held 58% of the total stock while the West (District 6 and Binh Tan) accounted for 20%.

About 6,700 additional units were estimated to have been delivered in the last quarter of 2024, particularly from projects such as Vinhomes Grand Park - The Opus One, and The Forest Gem.

Though, supply is expected to improve in the coming years. Revised laws, city planning updates, and key infrastructure completions will buoy the market.

"By 2027, more than 50,000 units from 76 projects will be launched. Thu Duc City will account for 49% of the supply, District 7 for 12%, and Binh Tan for 9%," said Savills.

Supply of villas and townhouses growing but remains scarce

In Hanoi, 176 new villas and townhouses entered the market in Q3 2024, up by 38% from the previous quarter. The new supply came from Thanh Lam Dai Thinh 2 in Me Linh, Solasta Mansion in Ha Dong, and Him Lam Thuong Tin in Thuong Tin.

The total primary stock of villas and townhouses in the capital city stood at 673 units, up by 11% q-o-q but down by 7% y-o-y.

In Q4 2024, 2,975 dwellings were estimated to have been delivered to the market, according to Savills. These additional units came from Vinhomes Global Gate, Him Lam Vinh Tuy, and Solasta Mansion.

"Dong Anh District will account for the largest share of future stock at 19%, followed by Me Linh with 16% and Ha Dong with 15%," said Savills.

In HCMC, the new supply was limited to 145 units, but a huge improvement from just 10 units in the previous quarter and zero from a year earlier. The new supply came from The Meadow project in Binh Chanh and the next phase of The Sholi Binh Tan.

The primary stock of villas and townhouses in HCMC reached 766 dwellings in Q3 2024, up by 15% from the previous quarter but largely unchanged from a year earlier. Thu Duc City accounted for about 67% share of the primary supply, followed by Binh Chanh with 19% share.

In Q4 2024, it was estimated that an additional 140 units of newly built villas and townhouses have entered the HCMC market, based on projections released by Savills.

"By 2027, future supply is projected to reach 5,182 dwellings. Suburban areas (Binh Chanh, Nha Be, Cu Chi, Can Gio) will account for 59%, Thu Duc City 28%, Binh Tan 12%, and District 8 will hold the remainder," noted Savills.

Historic Perspective:

The memory of a housing bust (2009-2013)

Vietnam witnessed a prolonged housing crisis after the 2008-9 global financial crisis. Property prices plunged by double-digit figures. The government was embarrassed, banks were bankrupted, and the economy slowed sharply.

The banking system effectively collapsed. One out of every ten loans in the banking system stopped paying.

To bolster demand, the government provided the real estate market with a US$1.4 billion stimulus package in 2013, subjected developers to stricter financial requirements, and bought US$8 billion of non-performing loans. The central bank slashed the refinance rate and discount rate several times and gave about US$197 million in credit to homebuyers through Vietinbank. These measures were, over time, successful.

Pre-pandemic real estate growth

Following several years of housing decline, the Vietnamese government's efforts helped the real estate market recover - in fact, apartment prices in HCMC surged 75% (63% inflation-adjusted) from 2017 to 2019.

Vietnam has begun to be seen as the next luxury property market hotspot, with a booming economy, coupled with laws that recently have made it easier for foreigners to buy. As a result, wealthy international investors have been drawn to the country.

Vietnam's improving infrastructure is also a plus factor. "Vietnam focuses on investment in infrastructure including 2,000 km of new highways, subway systems in Hanoi and Ho Chi Minh City, and many airport expansion and construction projects," said JLL.

Aside from increasing foreign interest, the property market was also buoyed by strong demand from wealthy locals. The homeownership rate in Vietnam exceeds 90% - one of the highest rates in the world.

"We have more and more very rich Vietnamese, particularly entrepreneurs looking for places to put their money," said Niel MacGregor of Savills Vietnam.

Rental Market:

Apartment rental growth in Hanoi slowing; supply more or less steady

In Hanoi, the average asking rent for Grade A apartments was US$26.8 per sqm per month in Q4 2024, down by 4.1% from a year earlier, according to CBRE. Quarterly, rents were up slightly by 0.2% during the latest quarter. On the other hand, Grade B apartments' average monthly rent rose by a meager 0.2% q-o-q to US$17.6 per sqm in Q4 2024.

Overall, the market rent for serviced apartments stood at an average of US$24.8 per sqm in Q4 2024.

The average vacancy rate for both grade projects combined was registered at 20.7% in Q4 2024. Over the same period:

• Grade A apartments: vacancy rate of 18.7%, down by 2.9 percentage points from the previous quarter and by 8.9 percentage points from a year earlier
• Grade B apartments: vacancy rate of 28.6%, down by 2.7 percentage points from the previous quarter but up by 3.3 percentage points from the same period in the prior year

Expats working in industrial parks are a major source of demand for serviced apartments in Hanoi.

The supply of serviced apartments in Hanoi was more or less steady at 5,222 units. In fact, no new projects entered the market in Q4 2024.

Grade A serviced apartments dominated the market, representing about 80% of the total supply.

Hanoi's serviced apartment market is expected to see an additional supply of over 2,881 new units in the next three years.

"Seven upcoming projects are projected to add over 2,881 units to the market, with the majority of future supply to come from favorable locations such as Ba Dinh, Tay Ho, and Tu Liem districts," said CBRE. "This influx in the coming years signals ongoing recovery and highlights Hanoi's potential as a hub for high-quality serviced apartments, prompting landlords to implement more flexible rental policies to attract tenants."

Low to moderate rental yields

The average gross rental yields in Vietnam - the return earned on the purchase price of a rental property, before taxation, vacancy costs, and other costs - stood at 3.83% in Q1 2024, down from 4.02% in Q3 2023, according to the Global Property Guide. Gross rental yields in Hanoi, Ho Chi Minh City, and Da Nang can be low to moderately good, depending on location.

• In Hanoi, gross rental yields range from 1.52% to 5.07%, depending on the district but still, the overall average for the city is 3.7%.
• In Ho Chi Minh City, yields are slightly higher, at between 2.7% and 5.39%, again depending on the district. The average for the city is 4%.
• In Da Nang, the rental yields are between 3.17% and 4.25% with an average of 3.81%.

Mortgage Market:

Interest rates falling, but mortgage market still underdeveloped

As of December 2024, the State Bank of Vietnam (SBV), the country's central bank, held its benchmark refinancing rate unchanged at 4.50%. The discount rate was also kept at 3.00%. This move aims to boost lending growth and buoy economic activity.

In early 2024, the central bank asked credit institutions to reduce loan interest rates and supply capital for prioritized sectors, including individual housing demand, social housing, houses for workers, and affordable commercial housing projects.

Then on November 27, 2024, the SBV released Document No. 9774/NHNN-CSTT, instructing credit institutions and the central bank's municipal and provincial branches to rigorously enforce measures to stabilize deposit interest rates and make greater efforts to lower lending interest rates.

Many banks in Vietnam have rolled out mortgage packages with interest rates fixed at 5% to 6%, the lowest level recorded in the past decade.

At Shinhan Bank, fixed interest rates for mortgages are currently at 5.5% to 6% annually, nearly half the 9% to 10% rate prevalent in Q2 2023, said Nguyen Thanh Hai, the bank's regional head at its HCMC branch.

At state-owned banks Agribank, Vietcombank, VietinBank, and BIDV, the fixed interest rates on mortgage loans hover around 5% to 7%.

At private lenders such as BVBank, SHB, and ACB, fixed mortgage interest rates range from 5% to 8%.

Accordingly, floating mortgage interest rates are also declining by two to three percentage points at some banks. State-owned banks offer 9% to 10% rates while private financial institutions charge rates above 12%.

However, the Vietnamese mortgage market is still underdeveloped. In Q3 2024, the total value of outstanding mortgages stood at VND 3,150 trillion (US$125.55 billion), up by 4.6% from a year earlier, according to the SBV. This relatively low growth rate points to a weakened demand in the mortgage market.

Most homebuyers pay cash. Developers are now starting to work with banks to offer mortgages to buyers, but strict loan procedures still hinder the local mortgage market. The loan-to-value (LTV) ratio rarely exceeds 50% of the appraised value of the property. The term period is usually 15 years.

Socio-Economic Context:

Amendments to Housing, Land, and Real Estate Laws

Vietnam opened up to foreigners nine years ago. Through the Housing Law (Law on Housing No. 65/2014/QH13) which became effective on July 1, 2015, foreigners who have been granted a Vietnamese visa, plus foreign investment funds, banks, Vietnamese branches, and representative offices of overseas companies could now purchase residential property. Foreigners can now own all types of properties, including condominiums and landed property such as villas and townhouses. Properties owned by foreigners can be sub-leased, inherited, and collateralized.

Moreover, overseas Vietnamese who have maintained their Vietnamese citizenship are treated like locals and are permitted to own unlimited property in their own names. It is estimated that about 70% of the 4 million overseas Vietnamese around the world still maintain their original citizenship.

For foreign individuals, the house ownership period is 30 years, but it can be extended. The new law also limits foreigners from owning more than 30% of a single apartment building, or more than 350 houses and apartments in a ward, a subdistrict-level administrative area.

Detailed guidelines on implementing the Housing Law (Decree 99) became effective on December 10, 2015. According to Decree 99, foreigners are allowed to own houses in Vietnam as long as they are able to meet these conditions:

• The foreigner's valid passport should have an entry stamp affixed to it from Vietnam's immigration authority.

• They should not be in the category of people entitled to preferential treatment or diplomatic immunity in accordance with the Ordinance on Preferential Treatment Rights and Immunities Applicable to Representative Diplomatic Offices, Foreign Consulates, and Representative Offices of International Organisations in Vietnam.

On August 15, 2016, the Ministry of Construction Circular 19/2016/TT-BXD (Circular 19) which contains guidelines on the Law on Housing, and on Decree No. 99/2015/ND-CP, became effective. As for individual houses under commercial housing projects (including villas and semi-detached housings), foreigners are allowed to own 10% of the total individual houses of a particular project.

Despite these developments, Vietnam's land, housing, and real estate laws are still publicly perceived as rather complex and confusing because of inconsistency in some provisions. To address this issue and to encourage foreign investment, the government recently amended its Land Law and the related Housing Law. The amended laws were approved in November 2023 and officially took effect on January 1, 2025.

"According to the Law on Housing 2014 and Law on Real Estate Business 2014, foreigners are entitled to buy and own houses in Vietnam, including apartments and separate houses associated with land use rights. Meanwhile, according to the Land Law 2013, foreigners are not eligible to own land use rights in Vietnam. Therefore, the proposed amendments in the Revised Law on Housing are considered essential to ensure a consistent and rigid regulatory framework for foreigners looking to buy property in Vietnam," said Dang Phuong Hang of CBRE Vietnam.

There are more than 100,000 foreigners currently living in Vietnam, up from about 83,500 three years ago. Most of the migrants come from China, Korea, Japan, Taiwan, and the United States. They are concentrated in big cities such as Hanoi, HCMC, Da Nang, and Nha Trang.

Since the 2014 Housing Law came into effect, a total of 3,035 foreign individuals have purchased homes in Vietnam, according to figures from the Ministry of Construction. Most of these purchases involve apartments in commercial residential projects.

Foreign organizations and individuals have primarily acquired properties in Hanoi (1,765), Ho Chi Minh City (850), Bac Ninh Province in the north (110), Binh Duong Province in the south (210), and Ba Ria-Vung Tau Province (50).

New free trade agreements attract more foreign investors

In recent years, Vietnam signed two landmark free trade agreements that are expected to boost foreign investments and accelerate institutional reform.

The EU-Vietnam Free Trade Agreement (EVFTA), which came into force in August 2020, will provide opportunities to increase trade and support jobs, through the following:

• eliminating 99% of all tariffs;
• reducing regulatory barriers and overlapping red tape;
• ensuring the protection of geographical indications for over 200 products;
• liberalizing government procurement rules;
• obligations on antitrust and mergers; and,
• provisions on sustainable development, particularly on climate, labor, and human rights.

The EVFTA is considered the most comprehensive agreement so far between the EU and any ASEAN country.

The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) also came into force in January 2019 - a free trade agreement between Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, Peru, New Zealand, Singapore, and Vietnam. The agreement is expected to benefit the real estate market.

• Foreign investors are protected through the Investor-State Dispute Settlement (ISDS) mechanism, which applies to cross-border investments in property development.
• The CPTPP also enlarges the real estate services in which foreign investors can participate, including real estate brokerage services, real estate exchange floors, real estate consulting services, and real estate management services, with respect to both residential and commercial properties.

The positive effects of these new free trade agreements are now being felt after the removal of Covid-related restrictions and as economic activity returns to pre-pandemic levels.

Foreign investments remain robust

During 2024, the value of disbursed foreign direct investment (FDI) capital in the country reached a record high of US$25.35 billion, up by 9.4% from a year earlier, based on figures from the Ministry of Planning and Investment. In fact, it was the highest disbursement level ever recorded.

However, total FDI fell slightly by 2.9% to US$38.23 billion in 2024 from a record-high US$39.39 billion in the prior year. Singapore accounted for the biggest share, at about 26.7% of the total FDI, followed by South Korea (with 18.5% share), China (12.4%), Hong Kong (11.4%), and Japan (9.2%).

As of December 31, 2024, Vietnam has 42,002 active foreign investment projects, with a total registered capital of nearly US$502.8 billion. Of this, around US$322.5 billion has been disbursed, representing 64.1% of the total registered investment capital.

Vietnam's ten leading FDI destinations included Bac Ninh, Hai Phong, Ho Chi Minh City (HCMC), Quang Ninh, Hanoi, Binh Duong, Dong Nai, Nghe An, Ba Ria-Vung Tau, and Hung Yen.

The real estate sector attracted over US$6.31 billion, accounting for a 16.5% share of the total foreign investments. it experienced a notable growth of 19% in 2024 compared to the previous year.

"There are a number of segments that investors pay attention to. For example, the residential real estate segment continues to attract a lot of attention due to urbanization and rising housing demand in large cities. The supply of new projects is recorded at a low level due to legal restrictions, meaning this segment receives a lot of attention from foreign investors," said Nguyen Le Dung, head of the Investment Department of Savills Hanoi.

Spectacular economic growth, strong tourism

During 2024, Vietnam's economy grew robustly by 7.09%, mainly driven by strong exports and foreign investment inflows, according to the figures released by the General Statistics Office (GSO). It was an acceleration from the real GDP growth rate of 5.05% in 2023 and 8.02% in 2022.

Vietnam is a service-oriented economy, with the services sector accounting for almost half of the country's total GDP.

• The services sector emerged as the primary growth driver during 2024, contributing about 42.36% share, slightly up from the previous year's 42.3% contribution.
• The industrial and construction sector accounted for a 37.64% share of the country's GDP last year, slightly up from 37.58% in 2023.
• The agroforestry-fishery sector had a share of 11.86% last year, nearly unchanged from the prior year.

The International Monetary Fund (IMF) expects the Vietnamese economy to grow by a robust 6.1% this year and by another 6% in 2026. The World Bank is even more optimistic, projecting a real GDP growth rate for Vietnam of 6.6% in 2025.

Oxford Economics' economic forecast for Vietnam is also closely aligned, projecting a real GDP growth of 6.5% this year.

"Vietnam's economy will be the standout among the ASEAN-6, growing at a faster pace relative to its peers during the next few years. We think growth in 2025 will be 6.5% y/y, led by manufacturing, with contributions from machinery and textiles. Upside risks are present, with a possible boost from the front-loading of orders driven by US tariff fears," said Oxford Economics.

Despite the adverse impact of the Covid-19 pandemic, the Vietnamese economy managed to post decent growth of 2.87% in 2020 and another 2.56% in 2021, coming after almost four decades of uninterrupted growth:

• 1981-1990 - average real GDP growth of 5.9% per year
• 1991-2000 - average real GDP growth rate of 7.6% annually
• 2001-2010 - average real GDP growth rate of 6.8% annually
• 2011-2020 - average real GDP growth rate of 6.2% annually

"Viet Nam's growth acceleration, one of the longest on record, started in 1991 and was upended only by the COVID-19 recession of 2020. Between 1991 and 2019, Vietnam's real annual GDP growth per capita averaged 5.6 percent, almost twice the rate in non-acceleration years. This sustained period of growth was accompanied by a substantial decline in inflation, low unemployment rates, modest fiscal and current account deficits, and relatively low debt levels," said the World Bank in its Global Economic Prospects published in January 2025.

"Even during the global recession of 2009, the country maintained positive growth, reflecting the strength of its domestic market and the effectiveness of government policies," added the World Bank.

Tourism is steadily recovering and has almost reached pre-pandemic levels. During 2024, there were nearly 17.6 million foreign visitors in Vietnam, up by a spectacular 40% from a year earlier, according to the country's GSO. It is now the second biggest number of arrivals recorded in Vietnam, behind the 18 million visitors welcomed in 2019 prior to the Covid-19 pandemic.

Tourist arrivals grew by an annual average of 23% during 2016-19 before plunging by nearly 90% annually in 2020 and 2021. The sector has been continuously recovering since.

By means of transport:

• By airways: 14.85 million foreign visitors, up by about 36% compared to a year ago
• By sea: 2.49 million foreign visitors, up by 63% from a year earlier
• By land: 248,100 foreign visitors, nearly twice as many as the previous year

South Korea accounted for the biggest share of about 25.6% of total international visitors in Vietnam during 2024, followed by China (21.2% share), Taiwan (7.3%), the United States (4.4%), Japan (4.0%), India (2.8%), Malaysia (2.8%), Australia (2.8%), Cambodia (2.7%), and Thailand (2.4%).

"Favorable visa policies, enhanced tourism promotion programs, and prestigious tourism awards presented by international organizations have attracted an increasing number of international visitors to Vietnam," said the GSO.

Vietnam aims to welcome a record high of 23 million international tourists in 2025, a more than 30% jump from last year's arrivals, according to Tran Phong Binh, deputy director at the Vietnam National Authority of Tourism.

Annual inflation stood at 2.94% in December 2024, slightly up from 2.77% in the previous month but still higher than the 3.58% recorded in the same month last year, according to figures from GSO. Despite this, it remains within the central bank's inflation target of under 4.5%.

Inflation slowed to an annual average of just 3.2% from 2013 to 2023, from an average of 11% from 2004 to 2012.

The labor market remains tight. The country's unemployment rate was 2.24% in Q3 2024, slightly down from 2.29% in the previous quarter and 2.3% a year earlier, according to GSO.

From 6.42% in 2000, Vietnam's unemployment rate has continuously declined to reach 2.17% in 2019, according to the IMF, but increased to 2.48% in 2020 and further to 3.2% in 2021 due to the pandemic. The labor market started to improve again in recent years, with the jobless rate falling to 2.32% in 2022 and 2.01% in 2023.

Vietnam remains under the U.S. currency manipulator watch list

In January 2016, the central bank announced a move to a market-based exchange rate mechanism, setting daily reference exchange rates, to discourage hoarding of US dollars. However, the new rate is not really "free". The central bank sets a reference rate daily, and local and foreign banks in Vietnam can trade within a band of plus or minus 3%.

In 2019, the US indicated that Vietnam was under scrutiny for possibly manipulating its currency. Then in August 2020, the US Treasury confirmed that the dong was undervalued by about 4.7% against the dollar in 2019 due in part to "government action on the exchange rate." In December 2020, the Treasury officially labeled Vietnam a currency manipulator, claiming that it "conducted large-scale and protracted intervention, much more than in previous periods, to prevent appreciation of the dong".

Finally, in July 2021, Vietnam reached an agreement with the U.S., pledging to "to avoid manipulating its exchange rate in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage and will refrain from any competitive devaluation of the Vietnamese dong."

In its December 2021 and June 2022 semiannual reports, the U.S. Treasury stated that it continues to engage closely with Vietnam to monitor the latter's progress in addressing the U.S. concerns.

Then in its November 2022 report, the U.S. Treasury finally removed Vietnam from the monitoring list for currency manipulation, after the Southeast Asian country exceeded the threshold for the criterion of surplus of trade in goods and services with the United States.

However, in its June 2024 report, the U.S. Treasury included Vietnam on its watch list again, as the country meets two of the three criteria: a trade surplus with the U.S. of at least US$15 billion, a global account surplus above 3% of GDP and persistent one-way net foreign exchange purchases of at least 2% of GDP over 12 months. Other countries on the watch list included China, Japan, Taiwan, Malaysia, Singapore, and Germany.

Then in its November 2024 report, the U.S. Treasury retained Vietnam on its watch list, as the country, along with Japan, Korea, Taiwan, and Germany, all meet the criteria for having a significant bilateral trade surplus with the U.S. and a material current account surplus. Despite this, the U.S. Treasury maintained that Vietnam is not manipulating its currency and commended SBV for its ongoing efforts to further modernize and enhance the transparency of its monetary policy and exchange rate management framework.

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• Gross rental yields in Vietnam: Hanoi and Ho Chi Minh (Global Property Guide): https://www.globalpropertyguide.com/
• Homebuyers hesitant to borrow despite lower mortgage interest rates (VN Express): https://e.vnexpress.net/
• Banks slash mortgage rates to decade low (VN Express): https://e.vnexpress.net/
• Vietnam's Top Investors and FDI Beneficiaries - January to November 2024 (Vietnam Briefing): https://www.vietnam-briefing.com/
• Vietnam's FDI disbursement in 2024 reports record high (Xinhua): https://english.news.cn/
• FDI disbursement in Vietnam in 2024 hits record high (Vietnam Law and Legal Forum): https://vietnamlawmagazine.vn/
• The real estate sector saw FDI increase 60 percent in 2024 (Vietnam Investment Review): https://vir.com.vn/
• Vietnam Unemployment Rate (Trading Economics): https://tradingeconomics.com/
• Vietnam Inflation Rate (Trading Economics): https://tradingeconomics.com/
• Vietnam's GDP growth estimated at 7.09% in 2024: GSO (Vietnam Plus): https://en.vietnamplus.vn/
• Vietnam to become Asia-Pacific region's fastest growing economy in 2026 (Vietnam Law and Legal Form): https://vietnamlawmagazine.vn/
• Vietnam: At a Glance (International Monetary Fund): https://www.imf.org/
• Global Economic Prospects January 2025 (World Bank): https://openknowledge.worldbank.org/
• IMF Executive Board Concludes 2024 Article IV Consultation with Vietnam (International Monetary Fund): https://www.imf.org/
• Vietnamese economy forecast to retain steady growth despite global uncertainty (Vietnam Law & Legal Form): https://vietnamlawmagazine.vn/.
• Vietnam: Growth will be ahead of regional peers in 2025 (Oxford Economics): https://www.oxfordeconomics.com/
• Socio-economic situation in November and 11 months of 2024 (General Statistics Office): https://www.gso.gov.vn/
• Vietnam sets an ambitious target of 23 million tourists in 2025 (Travel Weekly Asia): https://www.travelweekly-asia.com/
• Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States (U.S. Department of the Treasury): https://home.treasury.gov/
• US Government Officially Labels Vietnam a Currency Manipulator (The Diplomat): https://thediplomat.com/
• Joint Statement from the U.S. Department of the Treasury and the State Bank of Vietnam (U.S. Department of the Treasury): https://home.treasury.gov/
• Vietnam dropped from the US currency monitoring list (Vietnamnet Global): https://vietnamnet.vn/
• US says Vietnam not manipulating currency (Hanoi Times): https://hanoitimes.vn/