Southern Viet Nam’s real estate market is undergoing a significant transformation as the country’s economy continues to maintain strong growth momentum. Despite headwinds from higher capital costs, the combination of expanding manufacturing activity, recovering consumer demand, and robust foreign direct investment (FDI) inflows continues to provide substantial support for the market. According to Savills, however, the key driver of new value creation in Southern Viet Nam’s real estate sector is increasingly tied to structural connectivity.
1. Macroeconomic Strengths Amid Capital Cost Pressures
Viet Nam's economic fundamentals remained resilient in H1/2026. Manufacturing activity continued to expand, with the Purchasing Managers' Index (PMI) reaching 51.8. Supported by a young and cost-competitive workforce, Viet Nam continues to strengthen its position within global supply chains.
Economic growth is being driven by three key pillars: manufacturing, consumption and investment. Manufacturing remains particularly important to exports and employment, with electronics, machinery and mobile devices among the leading sectors.
One notable development this year is that import growth has outpaced export growth. According to Neil MacGregor, CEO of Savills Vietnam, this should not be viewed as a negative indicator, yet as evidence of businesses increasing investment in production capacity.
Domestic consumption also showed signs of recovery, with retail sales increasing by 7% in the first half of the year. At the same time, higher interest rates are placing additional pressure on the real estate sector. Twelve-month deposit rates have risen, while mortgage rates can reach up to 13%.
According to Savills, while investment activity and leasing demand remain resilient, elevated borrowing costs are affecting developers' ability to launch new projects and influencing homebuyer sentiment.
"The reality is reflective of manufacturers increasing imports of machinery, equipment, and raw materials to expand operations and strengthen production capabilities."
Neil MacGregor
.jpg "Hạ tầng kết nối phát triển thị trường bất động sản phía Nam năm 2026.")
Infrastructure connecting and developing the southern real estate market in 2026.
2. Infrastructure Is Redefining Real Estate Value in Southern Viet Nam
Against this backdrop, infrastructure is becoming an increasingly important factor in determining the long-term potential of real estate assets. Vietnam, specifically the southern region, is entering one of the most intensive periods of infrastructure investment in its history.
In HCMC major projects including Ring Road 3, Ring Road 4, Metro Line 2, the railway connecting the city center to Can Gio, and transportation links serving Long Thanh International Airport are gradually progressing.
Between 2026 and 2030, the city has identified 250 priority investment projects aimed at accelerating growth, strengthening regional integration, and developing the city into the nation’s leading hub for high-tech services and innovation. Within this context, Savills believes infrastructure is becoming one of the key factors reshaping urban development patterns and redistributing real estate value.
As travel times shorten and economic corridors expand, property locations are increasingly being assessed through a different lens, not solely based on proximity to the city center, but also on their connectivity to employment hubs, manufacturing centers, logistics networks, and service clusters.
The significance of these projects lies not only in their scale, but also in their ability to transform urban development patterns and redistribute real estate value.
As transport infrastructure continues to improve, HCMC is increasingly functioning as the centre of a wider economic region, strengthening connections with neighbouring provinces and Southern Viet Nam's key economic corridors.
This is expected to support new opportunities across urban areas, logistics hubs, industrial corridors and commercial destinations beyond traditional CBD locations. As a result, accessibility and connectivity are likely to become increasingly important factors influencing property demand and long-term value.
"For many years, the most valuable real estate was typically located in central urban areas. Today, properties with the strongest connectivity have the potential to become the most valuable assets. This is a fundamental shift that will influence where people choose to live, where businesses establish operations, and where new sources of real estate value emerge."
Neil MacGregor
Images of the transportation infrastructure and real estate projects in the South in 2026.
3. FDI and Industrial Real Estate Continue to Support Economic Expansion
Alongside infrastructure investment, FDI continues to serve as a critical pillar of the country’s economic growth. During the first half of 2026, registered FDI reached US$28.4 billion. Northern Viet Nam accounted for 64% of total inflows, highlighting the country’s growing attractiveness as a destination for manufacturing and long-term investment.
Manufacturing continued to receive the largest share of investment, accounting for 65% of total registered FDI, while real estate attracted 19%. South Korea was reported as the largest investing country, surpassing Singapore, which had led investment rankings over the previous two years.
The impact of FDI extends beyond industrial real estate. New investment supports demand for employment, office space, housing, retail, hotels and serviced apartments, creating broader effects across multiple property sectors.
MacGregor noted that supply chain businesses are increasingly following major manufacturers into Viet Nam, strengthening the country's manufacturing base while reinforcing its appeal to international investors.
Beyond manufacturing, Savills has observed significant investment commitments across education, healthcare and energy infrastructure, supporting a more diversified economic base.
Industrial real estate remains one of the clearest indicators of the combined impact of FDI and infrastructure development. Industrial park occupancy has reached 90% nationwide, while average industrial land prices have approached VND 5 million per sq m and continue to strengthen in well-connected locations.
The RBF and RBW segment has also recorded an occupancy of 90%, with nationwide supply at 20 million sq m. Southern Viet Nam accounts for 57% of total stock.
.jpg "Bất động sản công nghiệp định hình giá trị bất động sản phía Nam.")
Industrial real estate is shaping the value of property in the South by 2026.
Conclusion
Viet Nam's development story is no longer defined solely by the pace of economic expansion. Increasingly, it is also shaped by where economic activity is concentrated and how effectively key locations are connected.
As ring roads, metro lines and airport infrastructure become operational, demand for residential, industrial, retail and hospitality real estate is likely to extend beyond traditional urban cores.
Locations with strong connectivity are expected to have a competitive advantage in attracting residents, businesses and investment. At the same time, new economic corridors may support the development of additional urban and commercial centres, reshaping real estate demand across HCMC and the wider Southern Viet Nam region.
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