The young generation, aged between 25 and 35, is entering one of the most crucial stages in life — the decision of where and how to settle down. They are not only the core workforce but also a leading group of potential customers in Vietnam’s real estate market. Amidst macroeconomic fluctuations and continuously rising housing prices, the decision to buy or rent a home has gone beyond a simple choice of residence, becoming a long-term financial strategy that deeply influences the stability and lifestyle of this generation.
I. MACRO LANDSCAPE: REFLECTION OF THE INCOME–HOUSING PRICE GAP
1.1. Alarming Housing Price Growth Rate
The Vietnamese real estate market has recently witnessed an alarming rate of price growth. According to market data, the average asking price for real estate nationwide surged from 74 million VND/m² in Q1 2023 to 101 million VND/m² in Q3 2025. This represents an increase of approximately 36% in less than three years.
This price increase is particularly severe in major cities, where property values continue to climb, far outpacing the growth rate of individual income. A 36% increase in housing prices over such a short period is a formidable rate. With the average worker's income only rising at 8-10% annually, the gap between housing prices and income is not just widening; it is creating a nearly insurmountable financial barrier for the young generation. Real data indicates that the young generation now needs to work and save for 20 to 25 years to afford a home. This raises questions about the feasibility and sustainability of traditional homeownership goals, as relying solely on conventional income accumulation is almost no longer effective without substantial financial support.
1.2. Market Segmentation and Geographical Spread
Amid rising prices, the market has seen a strong recovery in certain segments of genuine housing demand. Apartments led the recovery with a 22% increase in interest, followed by private houses at 13%. In contrast, land plots, which are often highly speculative, saw an 11% drop in interest. This focus on apartments and private houses indicates that genuine housing demand remains very strong, but buyers are budget-constrained and prioritizing affordable housing types over speculative assets.
A natural consequence of high prices in central areas is the geographical shift in demand. Real estate interest is increasingly spreading out rather than concentrating solely on the two major metropolitan areas of Hanoi and Ho Chi Minh City, as was previously the case. Specifically, while interest in Hanoi decreased by 22% compared to the same period in 2024, neighboring provinces emerged as bright spots, with the Hanoi suburban area recording an 11% growth rate. This shift reflects a new demographic pressure: excessively high prices in the city center are forcing the young generation to consider living further away, accepting a longer commute time to achieve the possibility of owning property. This is a crucial deciding factor when the young generation considers a strategy of buying a home in the suburbs or continuing to rent near the city center.
1.3. Unprofessional Rental Market Structure
Despite the shift towards renting, Vietnam's rental market still has fundamental limitations. Currently, the majority of rental housing supply is owned and managed by individuals, lacking participation from professional developers employing "build-to-rent" models. This shortage of professional rental models has created a significant gap in the market regarding service quality, contractual transparency, and price stability. This is fertile ground for the development of modern, professional rental models that offer comprehensive services. New models like Co-living and Serviced Apartments have emerged to meet the needs of the young generation, who prioritize amenities, community, and structured management. The growth of these models is a direct response to the unprofessional and unsatisfactory nature of the traditional rental market.
II. PSYCHOLOGICAL ANALYSIS AND FINANCIAL STRATEGY OF THE YOUNG GENERATION
2.1. Prioritizing Flexibility: The Value of Freedom
The young generation grew up with technology, valuing convenience, transparency, and especially freedom. In a volatile economic context, being committed to long-term debt, often spanning decades, is viewed as a feeling of being "stuck" or constrained financially and geographically. This psychological pressure is an invisible but significant cost, as it can prevent the young generation from seizing new career opportunities or moving to other cities. Therefore, the appeal of flexible rental options (1-5 year terms) has increased significantly. When making decisions, the young generation maximizes the use of technology to search for property through online platforms, utilize virtual tours, and analyze price data transparently before making a decision.
2.2. Personal Financial Risk Framework When Buying Early
The decision to buy a home early poses many personal financial risks, especially when relying on significant financial leverage. One of the biggest risks is macroeconomic volatility. If lending interest rates suddenly spike or the individual faces job loss risk (especially during an unstable economy), debt repayment can become an unbearable burden, potentially leading to asset loss. Furthermore, if a property is bought in an area without development potential, the real estate may depreciate, reducing the owner's net worth. To ensure financial safety, assessing affordability is mandatory. Financial experts recommend that monthly housing payments (installments) should not exceed the safe threshold of 30% to 40% of total monthly income. Even with stable income, borrowing beyond this threshold is an unwise move as it does not allow personal cash flow the flexibility to cope with unexpected economic shocks.
2.3. Diversified Investment Mindset
The modern young generation is adopting a different investment mindset, not prioritizing real estate as their top investment asset, especially during the initial capital accumulation phase. This trend supports the "Rent and Invest" financial strategy. By renting, the young generation accepts the rental cost (sunk cost) in exchange for higher liquidity and the potential returns from investing the capital that would otherwise be used for down payments and property maintenance costs. They are focusing on achieving financial independence through diversifying their investment portfolio, rather than being tied to a fixed asset with low liquidity and high leverage requirements.
III. EMERGING TRENDS: SERVICED APARTMENTS AND CO-LIVING MODELS – OPTIMAL HOUSING SOLUTIONS
3.1. Co-living: A Solution for Minimalist and Connected Lifestyles
Facing pressure from housing prices and the need for flexibility, new housing models like Co-living have become a favored trend among the young generation and Millennials. This group, including students, young workers, and digital nomads, often seeks affordable housing near workplaces or city centers, while also desiring a comfortable space that fosters social connection. Compared to traditional dormitories or rental rooms, the Co-living model is significantly more appealing due to its all-inclusive nature, offering fully furnished rooms with flexible individual leases, and most importantly, encouraging interaction, collaboration, and community formation.
3.2. Mid-range Serviced Apartment Market in Vietnam
The mid-priced serviced apartments segment has rapidly flourished in major cities over the past two years, especially in Ho Chi Minh City. Real estate developers see a great opportunity in leasing existing properties, furnishing them modernly, and transforming them into reasonably priced serviced apartments, rather than undertaking expensive new construction. The average rent for these apartments typically ranges around $500/month, targeting young customers with relatively good income and tech-savviness. These apartment chains develop smart home models, allowing tenants to easily use services like laundry, housekeeping, or ordering food/coffee, and make cashless payments via mobile apps. The success of these service chains, with some companies achieving occupancy rates above 90%, is clear evidence of the strong demand from the young generation for professional, high-quality rental services. This proves that the young generation is willing to pay for convenience, services, and flexibility, reducing long-term financial pressure while still ensuring privacy and comfort.
Comparison of Housing Models
| Criterion | Buying a Home | Traditional Renting | Serviced Apartments/Co-living |
|---|---|---|---|
| Financial Commitment | Long-term (20+ years), High constraint | Short-term (1-2 years), Flexible | Short/Medium-term (1-5 years), Very flexible |
| Initial Capital | Very high (30-50% down payment, transaction costs) | Low (1-2 months deposit) | Low (Deposit, service fees) |
| Service Quality | Self-managed, Maintenance risks | Low, Dependent on individual landlord | High, All-inclusive services (Smart Home, cleaning) |
| Community Opportunity | Low | Low | Very high, Encourages social connection |
| Asset Risk | Price volatility, Depreciation if wrong location is chosen | Low (Risk of rent increase) | Low (Risk of rent increase) |
IV. RISK MANAGEMENT AND THE ESSENTIAL ROLE OF VALUATION
4.1. Valuation: A Financial Protection Tool for Buyers
In the context of Vietnam's increasingly complex real estate market, valuation becomes a crucial tool for managing personal financial risk. Property valuation is the process of determining the monetary value of an asset for a specific purpose at a given time. The core role of valuation is to determine the actual value of the asset, based on objective factors such as location, area, construction status, surrounding amenities, and market trends. This ensures transparency and fairness in transactions. More importantly, valuation helps buyers avoid the risk of overpaying compared to the actual market value. This is an indispensable risk management step when using financial leverage to purchase a home.
4.2. Valuation in Rental Decisions
For individuals or organizations owning real estate and considering a rental strategy, rental property valuation is a common business practice that helps determine a reasonable rental price. This prevents overpricing or underpricing compared to the market, thereby maximizing profit for the owner. Factors influencing the rental price analyzed by the valuer include geographical location, area, design, condition, and accompanying amenities (such as parking, pool, security services).
V. PERSONALIZED STRATEGIC DECISION FRAMEWORK
The young generation's housing decision is a complex balance between financial capacity, market risk, and lifestyle goals. There is no one-size-fits-all answer; instead, a personalized strategic decision framework must be applied:
Case 1: Renting Strategy (Majority Segment)
- Conditions: Individuals whose income has not yet peaked or who are prone to changing residence, prioritize professional flexibility, and do not want to bear excessive debt (exceeding the 40% income threshold).
- Recommendation: Prioritize high-quality rental models such as Co-living or Serviced Apartments. Most importantly, implement the "Rent and Invest" strategy, leveraging the capital that would otherwise be used for down payments to invest in other, more liquid channels.
Case 2: Considered Buying Strategy (Strong Financial Segment)
- Conditions: Individuals who already have very stable income, whose monthly housing payment is within the safe threshold (30-40% of income), and who plan to settle down long-term in a specific location.
- Risk Management Recommendation: Only proceed with purchasing projects with transparent legality and consult professional, reputable Price Advisory units to advise on the actual value of the asset, ensuring no overpayment and mitigating financial risk.
DCF Vietnam
About us, DCF Vietnam is granted the Certificate of Eligibility for Valuation Service Business by the Ministry of Finance (License No. 130/TĐG) and is certified for service quality by the Royal Institution of Chartered Surveyors (RICS - Regulated Firm No. 791845), with over 12 years of experience in this field. We pride ourselves on being a pioneer in applying international standards and procedures, helping clients ensure transparency, accuracy, and legal compliance in all transactions. Furthermore, our valuation results are recognized not only in Vietnam but also across global markets.
REFERENCES
- Gold Season: Smart Financial Decision to Buy or Rent.
- HTLand: Gen Z Trends in Real Estate 2025
- Bao Moi: Average National Housing Price Exceeds 100 Million/m2
- Kinh Te Do Thi: Widening Gap between Income and Housing Price
- Lao Dong Newspaper: Young People Need 20–25 Years to Buy a House
- Coliving.com: Top 12 Coliving Spaces in Vietnam
DISCLAIMER
This content is the product of the author and does not reflect the views or stance of DCF Vietnam Corporation. Furthermore, this content is not intended to create a valuer-client relationship, does not constitute valuation/consultation, and does not replace professional valuation/consultation services. Actual and specific situations or assets require consultation with a professional valuer before taking any action related to the subject matter discussed herein.
