Experts say that the “provincial merger” is having a strong impact on the Vietnamese real estate market.
Positive impact on real estate market
According to Resolution No. 60 of the 11th Conference of the 13th Party Central Committee, the Central Committee agreed on the policy of rearranging provincial-level administrative units nationwide to 34 units, including 28 provinces and 6 centrally-run cities.
As soon as the merger news was announced, the domestic real estate market had certain impacts, in many places land prices increased by 30-50%…
At the online event “Real estate market overview in the first quarter of 2025” recently organized by Batdongsan.com.vn, Mr. Nguyen Quoc Anh, Deputy General Director of Batdongsan.com.vn said that the Vietnam real estate market continues to flourish on the basis of a positive economic change, even with strong fluctuations from the provincial merger plan.
According to data from Batdongsan.com.vn, the level of interest in real estate in March 2025 increased sharply compared to February 2025 in provinces with similar or complementary natural areas and population size. For example, in Da Nang and Quang Nam, the level of interest in Da Nang real estate increased by 39%, while in Quang Nam it increased by 96%.
In addition, provinces with similar geographical locations and natural advantages also recorded positive fluctuations such as Hung Yen increased by 36% – Thai Binh increased by 75%. Similar cases in scale, supporting the marine tourism economy also saw a significant increase in search volume such as Quang Binh increased by 45% – Quang Tri increased by 8%.
Notably, provinces with the potential to combine to become “super cities” witnessed a strong increase in real estate interest. For example, Ho Chi Minh City increased by 13%, Binh Duong increased by 49%, Ba Ria – Vung Tau increased by 42%…
However, the market faces challenges in management, avoiding unsustainable land fever. In addition, there are differences in society and culture in localities. The difference in economic development between regions can create a common growth driver.
Taking the example of the merger of Ha Tay province (formerly) into Hanoi in 2008, the expert said that this area recorded positive fluctuations in real estate prices, but also had shortcomings. Over the past 10 years (2016-2025), real estate prices in Hanoi have increased by an average of about 2.4 times, while prices in Ha Tay (old) have increased by about 2.6-15 times. However, during this period, many projects in old Ha Tay were delayed or abandoned, raising questions about the sustainability of price increases.
Therefore, this expert recommends that when evaluating opportunities from provincial mergers, investors need to carefully analyze economic, cultural, infrastructure and management factors. Real estate values are only truly positively impacted when leveraging local economic growth and improving the investment environment. Buyers should avoid the “surfing” mentality based on short-term price increases. Investors need to invest selectively, based on data analysis and regional compatibility will be the key to avoiding risks.
Looking at the issue of “hot” land price increases following information on provincial mergers, Dr. Nguyen Van Dinh, Chairman of the Vietnam Real Estate Brokers Association, said that the increase in land prices following planning changes is not new to the Vietnam real estate market. History shows that whenever information about new planning appears, land prices in the related area often increase sharply in the short term. The main reason comes from the FOMO (fear of missing out) mentality of investors.
According to Mr. Dinh, the merger of provinces and cities will have a positive impact on the real estate market, possibly helping to reduce some legal procedures for project implementation, helping the market have more supply, especially in the affordable housing segment. People will have more options to buy houses at more reasonable prices.
However, for real estate values to increase sustainably, there must be a foundation, which means there must be synchronous development of transport infrastructure and socio-economy. If they only increase according to rumors about infrastructure and planning, it is easy to risk burying capital and incurring losses.
Land prices in many places increased sharply in the first quarter
At the real estate market report event for the first quarter of 2025 recently organized by Batdongsan, Mr. Dinh Minh Tuan, Director of Batdongsan in the Southern region, said that in March alone, after the explosion of information about the merger of provinces and cities, land prices and searches nationwide fluctuated strongly, increasing by an average of 20-67% compared to the same period.
Along with prices, the number of searches for land in March also increased by an average of 50% compared to the previous February. Hanoi’s land searches increased by 52%, Ho Chi Minh City increased by 31%, and the remaining provinces increased by 54-140% compared to February. The land segment was also assessed by brokerage firms as having the strongest growth in transactions in the first quarter. More than 44% of brokerage firms said that transactions increased by 10% or less and 24% said that transactions increased by 10-50%.
The report of the Vietnam Association of Realtors (VARS) also shows that in March, just a few weeks after the information about the proposed merger of provinces and cities, land prices in some localities were pushed up, in some places up to 20-30%. However, in reality, the number of recorded transactions only increased in the provinces and cities predicted to be the merger center, where the real estate price level was not too high.
According to DKRA Group, in the first quarter of this year, land prices increased locally in some provinces and cities such as Nhon Trach (Dong Nai) increased by 30-50%, Phu My, Chau Duc (Ba Ria – Vung Tau) increased by 20-30% while most of the southern provinces only increased by an average of 6-8%. This local increase was led by information about the merger of provinces and cities.
