In major cities such as Hanoi and Ho Chi Minh City, birth rates are approaching the United Nations' classification of “very low fertility” (under 1.3 children per woman).

Amid trends of delayed marriage and a growing sentiment among young people to avoid marriage and parenthood - especially in urban areas - Vietnam is undergoing rapid population aging.

VARS highlights that the shrinking birth rate leads to smaller household sizes and fewer new households being formed. The number of people in the prime age for working and starting families - key demographics for real estate consumption - is also declining.

This demographic shift is weakening overall housing demand and redirecting interest toward smaller, more cost-effective properties rather than large, high-value apartments.

With actual demand decreasing, market absorption rates have sharply declined, particularly in segments that do not align with the emerging demographic trends.

At the same time, housing prices remain high and show limited flexibility in adjustment. This has intensified challenges in selling large, expensive units. As a result, inventory risks are rising, capital turnover is slowing, and liquidity pressures are mounting on property developers. The market is now under pressure to adjust product structure, pricing policies, and financial solutions to stimulate demand.

“In the context of continuously rising home prices that far outpace the financial capacity of most citizens - and especially young people whose incomes are not keeping up with the increases - a large portion of this generation is abandoning the expectation of owning a home and turning to long-term rental instead,” VARS stated.

This reality not only impacts real estate buying behavior but also negatively influences decisions around marriage and childbirth, raising future concerns about further declines in the birth rate.

In practice, home prices in major cities have continued to rise sharply over recent years. According to a report from the Ministry of Construction, apartment prices in Hanoi and Ho Chi Minh City reached record highs in Q2/2025 - the highest in nearly a decade.

In Hanoi, the average selling price in Q2 was 80 million VND per square meter (approximately USD 3,150), while in Ho Chi Minh City it was 89 million VND/m2 (about USD 3,500). At these prices, even a couple earning 40 million VND/month (USD 1,575) would find it difficult to afford a home. Assuming they save 30% of their income (about USD 5,670/year), it would take nearly 40 years for them to achieve the dream of homeownership.

Experiences from Japan, South Korea, and Singapore show that persistently low fertility rates combined with high housing costs can result in a shortage of young labor, increasing burdens on social welfare, and putting pressure on economic growth.

To avoid this cycle, VARS recommends a comprehensive approach to maintain affordable housing prices, expand the supply of reasonably priced homes, offer financial assistance to young buyers, and encourage marriage and childbearing.

Specifically, the government should ramp up development of social housing in major cities, especially rental and rent-to-own models, with the state playing a central role in establishing housing stock.

Additionally, businesses should be encouraged to develop affordable commercial housing through incentives in procedures, credit access, or additional scoring in project bidding processes.

The association also suggests incentivizing developers to shift from “build-to-sell” to “build-to-rent” models, focusing on long-term, sustainable cash flow generation.

Hong Khanh