A new report by the Vietnam Real Estate Market Evaluation Research Institute (VARS IRE) said that the urban space restructuring process is not only aimed at adjusting the distribution of population, labor and economic resources, but also entails a profound restructuring of the Hanoi real estate (RE) market, especially changes in housing choices and investment strategies in the medium and long term.
According to the Master Plan of the Capital with a 100-year vision, Hanoi has established a population reduction roadmap to reduce pressure on the historic inner city area. In the period 2026-2045, Hanoi plans to relocate a total of more than 860,000 people. This decision shows the great determination of the government in handling long-standing problems such as high population density, overloaded infrastructure, lack of public space and declining quality of living environment in the inner city area.
VARS IRE believes that practical experience shows that if only focusing on relocating residences without simultaneously relocating livelihoods, the population reduction process is very difficult to achieve real efficiency. People are only willing to leave the central area when the area comes not only with housing, but also ensuring long-term living conditions, especially job opportunities, health - education systems and a better living environment.
Therefore, VARS IRE believes that, in parallel with investing in transport infrastructure, Hanoi needs to promote the relocation of urban functional areas such as administrative agencies, offices, schools, hospitals and research centers to suburban areas. This relocation not only creates local jobs, but also contributes to forming new development poles, helping people move according to work flows and economic opportunities naturally, instead of being mandatory.
In the medium and long term, the real estate market in the central area of Hanoi will continue to differentiate clearly. Luxury and super-luxury projects in the central area maintain high price levels and price increases in the medium and long term, serving elite residents, senior experts and high-quality human resources, in line with the international integration orientation of the Capital.
Notably, according to the project, the central land fund after reconstruction is prioritized for commercial - service projects with high added value such as financial centers, Grade A office areas. This is an important foundation for developing the super-high-end housing segment, associated with the above functional areas and existing housing needs.
In the opposite direction, the suburban area of Hanoi will be the place to absorb most of the relocated population. The market here is forecast to have many large-scale megacities, abundant and quality supply.
In addition, promoting housing development in suburban areas with many choices from increasingly quality products, including high-end and luxury products, helps people subject to relocation have more choices and facilitates reaching agreements.
Therefore, compensation with land or housing in areas that have been planned to become new development poles is considered a more appropriate solution. Areas that are and will form university clusters, hospitals, research centers and technology parks can become stable destinations for relocated populations.
In the context of a widespread sharp increase in real estate supply, with the emergence of a series of mega-urban projects and the increasingly drastic urban restructuring process, the real estate investment strategy needs to be adjusted in a cautious direction and prioritize the medium and long term.
In suburban areas, investors who are not under great financial pressure can continue to hold assets associated with real housing needs and new infrastructure axes, where there is still room for growth. Conversely, it is necessary to limit investment decisions based on short-term expectations, especially in areas that have become "hot".
In the central area, the luxury real estate segment continues to attract cash flow from groups of investors with strong financial capacity and long-term asset hoarding needs. Thanks to scarce supply and high rental demand, selling prices and rental prices at prime locations maintain a stable upward trend, similar to the developments in Ho Chi Minh City, where many central projects, despite high prices, still record very high absorption and occupancy rates.
Besides Hanoi, bordering localities with good economic foundations, benefiting from FDI capital flows and the development of industry - logistics are also worth considering options in the medium and long term.
