Vietnam's property market braces for fallout from US tarrifs
Vietnam's property market braces for fallout from US tarrifs
Vietnam’s real estate market is facing renewed anxiety following the United States’ surprise announcement of a 46-percent retaliatory tariff on Vietnamese exports. The measure, set to take effect April 9, is expected to have broad implications for the country’s economy, including its industrial and residential property sectors.
Vietnam's real estate market will encounter difficulties if the U.S. imposes a high tariff on Vietnamese goods, especially as the sector has not yet recovered from its ongoing challenges. Photo: Ngoc Hien / Tuoi Tre |
Real estate and industrial infrastructure firms told Tuoi Tre (Youth) newspaper on Thursday that the new tariffs will likely dampen investor confidence and disrupt foreign direct investment (FDI).
A senior executive at an industrial infrastructure company said that recent heavy investments in green industrial parks could be jeopardized, as these developments were designed to attract FDI inflows. The new tariffs threaten to alter capital flow projections and delay production plans for foreign firms operating in Vietnam.
Dinh Minh Tuan, southern regional director of Batdongsan, part of the PropertyGuru Group, warned that the tariffs could trigger a drop in FDI, affecting both industrial and residential real estate. He said multinational corporations might scale back or delay expansion plans, which would reduce demand for land and factory space, stall industrial park developments, and increase unsold inventory.
The impact could be particularly acute in industrial real estate hotspots such as Bac Ninh, Bac Giang, and Hai Phong in the north, as well as Long An and Binh Duong in the south.
Tuan also noted that weakened export performance could affect the workforce in manufacturing, leading to reduced working hours, lower wages, and job cuts, all of which would hurt consumer purchasing power and slow sales in the mid-range and affordable housing segments.
In addition, demand for high-end properties and rentals from foreign professionals may decline. Buyers and investors from South Korea, Japan, and China, who typically focus on luxury housing linked to FDI and industrial zones, may reduce their presence as fewer expatriates are stationed in Vietnam.
"When FDI declines, the number of foreign experts working in Vietnam also decreases, leading to a reduction in demand for high-end housing and rentals," Tuan said.
With inflation and exchange rate pressures already mounting, he added, borrowers in the housing market may struggle to repay loans, especially in the mid-range segment. The combined effect could usher in a cautious “wait-and-see” sentiment across the market, potentially triggering a temporary freeze in activity.
Tuan forecast that mid-range properties, industrial real estate, and the resort sector would be most vulnerable, while luxury properties may be more insulated due to their affluent customer base. Land plots, still relatively affordable, may also be less affected, with buyers continuing to wait for price appreciation.
The U.S. decision to impose steep reciprocal tariffs affects dozens of economies, but Vietnam faces one of the highest rates. A White House chart presented by President Donald Trump stated that the tariffs were intended to reflect the rates imposed by each country on American goods — in Vietnam’s case, allegedly up to 90 percent.
Prime Minister Pham Minh Chinh, responding to the announcement, reaffirmed the government’s commitment to achieving a minimum GDP growth rate of eight percent in 2025. He convened a meeting with key ministries on Thursday to evaluate the implications and ordered the formation of a task force to handle the situation.
Deputy Prime Minister Ho Duc Phoc is scheduled to depart for the United States on Sunday to hold discussions with American counterparts and stakeholders, including major exporters.
- 15:08 04/04/2025
