Recently, I came across a set of data on Vietnam’s housing prices, and it’s definitely worth paying attention to. In Hanoi, the price-to-income ratio has already surged to 27.7 times—this level is the highest since 2016–2017—and it continues to rise.

To be frank, this figure does raise some concerns. Buyers’ ability to repay is clearly declining, but housing prices have not stopped climbing. The logic behind it is also very straightforward: supply in the inner-city areas and in regions with well-developed infrastructure has been persistently tight. On top of that, after the tightening period of 2022–2023, capital has flowed back into real estate—especially apartment-type assets with clearly defined property rights, which have once again become the favored choice in family asset allocation. Land, construction, and financing costs are all rising. As prices for new homes go higher and higher, the secondary market follows the same upward trend.

There is an interesting comparison here. Vietnam and China’s price-to-income ratios look roughly similar, both around 27–28 times, but the market structures are completely different. Since 2022, China’s population has been decreasing, with a serious housing surplus—about 4 million units completed each year. In essence, the crisis is one of oversupply combined with high leverage. What about Vietnam? Its population is still growing, and its urbanization rate is only 45%, far below China’s 65–67%. This means there is still substantial room for actual housing demand. About 100,000 units are completed each year, but there is a shortfall of 300,000 units, mainly in the form of gaps in ordinary housing and social housing.

So the risks in Vietnam’s housing market are quite different from those in China. In the short term, the rapid rise in the price-to-income ratio does bring hidden concerns: the difficulty of buying homes is increasing, rental yields are declining, and the divergence across different projects and regions is also intensifying. However, compared with 2016–2017, the current credit environment is much more cautious, and the legal framework is also stricter. This suggests that the risks are more structural and localized rather than a bubble across the entire market.

For owner-occupiers, buying a home is indeed more difficult now, but the follow-up with social housing projects and plans to relocate population to the suburbs should be able to ease pressure to a certain extent. For investors, they need to be even more cautious: the cash-flow structure in real estate is changing, expectations for capital appreciation have fallen significantly, and you can no longer settle the accounts using the logic of the past.

Vietnam’s housing price market has moved from an accumulation phase into a higher-valuation cycle. Although the HPR indicator is nearing the level seen in China before its crisis, Vietnam currently does not have the structural conditions that would cause a bubble to burst. The key reason is that the differences in supply-demand dynamics and demographic structure are still very clear. In the short term, a major adjustment like China’s is unlikely to occur, but it is definitely necessary to keep a close watch.