Real estate market "hot" in the short term

However, the growth in prices and transaction volume in the above areas has speculative elements and poses many risks to the real estate market. Authorities in many localities have issued warnings about this situation and have strengthened control and management of the market.

Statistics from the Ministry of Construction in the report on the real estate market situation in the first quarter of 2025 just announced showed that the whole country recorded 101,049 successfully traded land plots, an increase of 16.4% compared to the previous quarter and 3% compared to the same period last year. Meanwhile, the total successful transactions of the apartment and individual house segment only reached more than 33,500 products.

Comparing these two segments shows that the volume of land transactions in the last quarter was more than 3 times the total volume of transactions of traditional housing products. This is a rare “phase difference”, showing that money is flowing strongly into land.

Along with the large number of transactions, land prices also recorded a sharp increase. For example, in Bac Giang , land prices in some areas of Bac Giang City increased by more than 20% compared to the end of 2024. Similarly, in Phu Tho, in some residential areas, even urban areas that have been abandoned for many years in the areas of Van Phu, Trung Vuong, Tho Son, Thanh Mieu, Gia Cam, land prices also increased by 20 - 30% compared to the same period last year. Or in Hai Phong, land prices in Kien Thuy, An Dong, Thuy Nguyen were pushed up by 15 - 20% compared to the end of 2024.

In the southern region, Nhon Trach ( Dong Nai ) continues to be a "land fever" spot. In just the first three months of the year, land prices in some areas in Long Tho, Phu Dong, Phuoc Khanh increased by 20-30%, in some places by over 40% compared to the same period last year.

Experts say that the merger of provincial administrative units has a certain impact on the real estate market with the phenomenon of hot price increases in some areas. However, this situation only lasts for a short time.

Regarding this phenomenon, Dr. Tran Xuan Luong - Deputy Director of the Vietnam Real Estate Market Research and Evaluation Institute commented that every time information about the merger of provincial administrative units appears, the real estate market in related areas shows signs of strong fluctuations. Taking advantage of the expectations of people and investors about changes in planning and infrastructure, some speculative groups have quickly entered the game with profiteering tricks.

“The price inflation mechanism often starts with spreading rumors about planning or the location of the new administrative center to stimulate buying psychology. Next, these groups can conduct internal transactions to create a fake ‘fever’ effect, causing land prices to skyrocket in a short time and be pushed up far beyond their real value,” Mr. Luong analyzed.

This expert recommends that to avoid falling into the "trap" of virtual fever, customers need to distinguish between a real estate market with real value and a virtual market. A truly healthy market must be based on real purchasing needs with real payment ability of the people, accompanied by transparent planning and legal information provided by the authorities. On the other hand, real estate in the real market must be able to generate cash flow through leasing or business, and be supported by transport infrastructure and utilities that have been or are being clearly formed.

Not only land and housing are affected, the merger of provincial administrative boundaries also creates movement for industrial real estate. Experts even expect it to create a "boost" for the Vietnamese industrial real estate market in the strategic transition period; creating leverage for the formation of large-scale industrial - urban areas, more attractive in the eyes of international investors.

Mr. Thomas Rooney - Deputy Director of Savills Hanoi Industrial Consulting Department commented that merging administrative units is not simply a change in terms of boundaries but also carries the goal of streamlining the apparatus, reducing fragmentation in planning and increasing competitiveness between localities. If implemented properly, it will pave the way for the formation of integrated urban - industrial ecosystems, which are more attractive to foreign investment flows that are increasingly selective in their destinations.

Accordingly, provinces can plan more new industrial parks with larger areas, providing more options for businesses. By increasing land funds, domestic and foreign businesses will easily find suitable locations to open factories, avoiding the scarcity of industrial land in localities with high demand.

In addition, after the merger, provinces with larger areas have the conditions to divide zoning more clearly, thereby developing specialized industrial parks or industrial complexes such as supporting industrial parks or specialized supporting industrial parks specializing in providing components and spare parts for large manufacturing industries or a specific manufacturing industry such as automobiles and semiconductors.

“Localities that are already bright spots in attracting investment, when merged and coordinated more closely in planning, will complement each other in terms of infrastructure, labor and development orientation. Large scale helps localities achieve higher standards in infrastructure and management, thereby improving their position in the global value chain,” Mr. Thomas analyzed.

However, there will be short-term challenges before long-term benefits are realized. Because administrative boundary adjustment will inevitably affect a series of factors from land use planning, investment licensing, to legal procedures related to the environment and construction.

Thus, according to Mr. Thomas Rooney, in the short term, businesses may face difficulties due to changes in management and policies that have not been synchronized between merged localities. However, in the long term, this is a great opportunity to rebuild a more transparent and effective legal framework. Coordinating and unifying procedures in new administrative areas will help save time and improve investor confidence.

For industrial real estate, where stability and clarity in planning are vital, unifying procedures and policies will pave the way for large-scale industrial parks, integrating logistics infrastructure, satellite cities and inter-regional transport connections.

If the merger is carried out in sync with infrastructure investment, especially belt roads, seaports, airports and digital infrastructure, industrial parks will no longer be limited by administrative boundaries. At that time, businesses can access the workforce from more localities, with more optimal operating costs.

The development of inter-regional infrastructure also promotes the trend of moving away from traditional industrial markets, where supply is limited and investment costs are increasing. New localities with large, cheap land funds and improved infrastructure will have the opportunity to become new industrial centers.