From Infrastructure to Assets: How Public Investment is Reshaping Vietnam’s Property Market

The Prominence of Real Estate in Vietnam’s Economy

At the recent seminar “Investment Compass 2026: Capital Flow in Focus,” economist Ngo Tri Long emphasized the crucial role real estate will play in Vietnam’s economy this year. Characterized as a “two-in-one” asset, real estate fulfills both consumption needs and long-term investment aspirations. It provides a unique advantage over equities and gold, as it is supported by a natural demand base that remains resilient as long as housing aligns with genuine living and working needs.

The Impact of Public Investment

Public investment in Vietnam is primed for acceleration in 2026, particularly within the realms of transport infrastructure and urban development. This focus aligns with the National Assembly’s ambitious double-digit economic growth targets. New infrastructure can drastically reduce travel time and costs, boost labor productivity, and elevate the functional value of both land and housing. This creates a phenomenon known as land value uplift, a critical factor driving continued investment flow into the real estate market.

Quality Over Quantity in Capital Flows

Long also pointed out that capital flows are not expected to be even across the board; rather, investors are likely to gravitate toward higher-quality assets. He noted that three core criteria will guide their decision-making: sound legal status, genuine demand, and real cash flow. As long as real estate can convert infrastructure advancements and economic growth into tangible value, it will keep its allure as a vital asset for long-term investment.

Real Estate’s Dual Returns

Nguyen Van Dinh, the vice chairman of the Vietnam Real Estate Association, highlighted how, under certain economic conditions, capital tends to channel into asset investment as a method for preserving and growing wealth. Real estate is particularly compelling in this regard, offering “dual returns” through both capital appreciation and stable income, whether via leasing or commercial usage.

Comparative Returns of Investment Channels

Dinh underscored the straightforward logic of capital markets: investors prefer channels that promise attractive returns. Traditionally, gold, equities, and real estate are perceived as safe havens, yet they differ significantly in their characteristics. Gold and equities generally offer higher liquidity and lower entry barriers, whereas real estate demands a stronger financial base and effective credit leverage.

Looking at the return perspectives, real estate has a marked advantage. Gold yields profits only during price increases, while equity dividends can struggle to keep pace with bank deposit rates. This structural advantage positions real estate as a reliable long-term investment, with historical trends showing property values on an upward trajectory, especially anticipated during the 2025-2026 period.

Anticipated Legal Reforms and Infrastructure Spending

The year 2026 could usher in substantial benefits for the property market, driven by anticipated legal reforms and vigorous public investments. A staggering VND1 quadrillion ($40 billion) is set aside for infrastructure disbursement, aiming to extend development momentum beyond major urban centers to emerging economic regions like the Mekong Delta.

Dinh remarked that the coordinated growth of urban infrastructure, industrial zones, and tourism services is a critical catalyst for various real estate segments. As transportation networks such as metro lines and rail connections evolve, they promise to redefine property values and development potential.

The Natural Filter of Rising Interest Rates

While optimism characterizes the property market, caution must also be exercised. Tran Dinh Thien from the Prime Minister’s Economic Advisory Group cautioned that the rising demand for capital could exert upward pressure on interest rates, serving as a natural filter that restrains speculative capital inflows. Higher financial costs and associated risks would require investors to be more discerning.

Thien further indicated that the current trend in public investment is moving away from asset speculation and into large-scale infrastructure projects. This shift allows domestic corporations to integrate deeper into value chains, generating beneficial spillovers for the stock market and the broader economy.

Commitment to Social Housing Development

The government’s firm commitment to developing social housing, with the involvement of over 20 major corporations, is also noteworthy. This initiative aims to broaden supply and stabilize prices, alleviating pressure on genuine homebuyers while mitigating risks of market overheating.

Long-term Macro-Economic Stability

In the long run, public investment will play a vital role in macroeconomic stabilization. The core aim of injecting substantial capital into the economy is to focus on enhancing the internal capabilities of domestic enterprises. This strategy not only bolsters resilience but also fortifies long-term competitiveness, setting a robust foundation for future growth.

The evolving landscape of Vietnam’s property market, shaped by governmental policies and infrastructure developments, signals a transformative period that holds significant potential for both investors and homebuyers alike.