Hanoi and Ho Chi Minh City each carry a substantial stock of ageing residential buildings, heritage structures, and public infrastructure that no longer meets the standards of a rapidly growing economy. Renewal is not optional, it is a national policy mandate, backed by legislation, provincial budget allocations, and a clear timeline of targets. For Australian property firms looking to lead in Southeast Asia, the combination of structural need, policy certainty, and accessible entry frameworks makes this landscape worth examining now.
Old Apartment Blocks, Heritage Buildings, and the Urban Renewal Challenge
Ho Chi Minh City is estimated to hold over 1,500 old apartment blocks requiring redevelopment, upgrade, or controlled demolition, many of them pre-1975 and Soviet-era structures that fall below current structural, fire, and habitability standards. These old apartment buildings sit on large, well-located inner-city land parcels with significant redevelopment value, making them a primary focus of the city’s renewal agenda.
Hanoi presents a different but equally significant heritage challenge. Its inner districts include French colonial-era buildings subject to heritage preservation orders alongside Soviet-era apartment blocks in need of urgent upgrade. The task is to preserve the heritage fabric that defines each neighbourhood’s character while improving the quality of life for residents who occupy ageing buildings across the capital’s central areas. This balance, between heritage preservation and residential improvement, defines the approach that successful renewal schemes in major city precincts must include.
Beyond structural condition, old apartment buildings in both cities carry a social dimension that the renewal process must address directly. Many residents have occupied their land, home, and immediate community for decades, in some cases since state allocation in the post-reunification period. Resettlement schemes must create genuine equivalence between the existing dwelling and the new one offered, and city planning authorities are legally required to ensure that people are not materially worse off after displacement. This people-centred obligation shapes the economics of every redevelopment scheme and is a key reason why experienced local partners are indispensable to foreign entrants.
Resident Compensation, Resettlement, and the People’s Committee Approval Framework
The legal process underpinning urban renewal is administered at the provincial level. The People’s Committee holds jurisdiction over land clearance plans, compensation assessment, and resettlement approval in each city. Before any redevelopment scheme can proceed, the city planning authority must approve the renewal plan, establish compensation rates for existing residents, and confirm resettlement arrangements for those displaced by land clearance.
For Australian property firms assessing land assembly risk, this structured approval process reduces political exposure while increasing upfront time costs. Partners with direct planning authority relationships and experience navigating the compensation and resettlement framework are essential, a reality that makes local joint-venture experience a prerequisite for foreign entrants, not an optional advantage.
Upgrading Roads, Drainage Systems, and Local Community Infrastructure
Renewal in Vietnam extends well beyond individual residential buildings. Provincial authorities are allocating state capital to upgrade roads, drainage systems, electrical networks, and community public spaces in parallel with the residential redevelopment pipeline. The 2022 Politburo Resolution identifies infrastructure improvement as a prerequisite for sustainable economic growth, and local government budgets include capital lines for drainage system construction, road widening, and public space creation across every major city.
The community benefit of these upgrade programmes extends beyond the immediate construction period. Improved roads reduce logistics costs and commute times for residents; upgraded drainage systems lower flood risk in inner-city areas that currently experience seasonal inundation; new public spaces enhance the liveability of dense residential neighbourhoods. For construction firms and engineering groups, each element of this infrastructure programme represents a discrete tendering opportunity within a national pipeline that will not diminish before 2030.
Lead Infrastructure, Economic Growth, and Future Value in Inner-City Land
Ho Chi Minh City’s 2025 infrastructure mobilisation target, USD 25 billion across state and private sources, encompasses road and drainage system works that will reshape the inner-city layout in the years ahead. Metro Line 1 became operational in December 2024, and the Hanoi network is building toward 18 lines spanning 979 kilometres under its 100-Year Capital Master Plan. These lead infrastructure schemes enhance the economic value of inner-city land and create strong incentive for old apartment block redevelopment in transit-adjacent areas.
Analysts say the combination of a large-scale public infrastructure programme and a ready stock of well-located inner-city land is unusual in Southeast Asia: most major cities have one but not the other, rarely both at the same time. The land use fee and compensation frameworks needed to unlock individual sites are already established by new policy under Resolution 06-NQ/TW, a condition that removes a layer of regulatory uncertainty that discourages foreign capital in less structured markets.
New Policy, Urban Planning Targets, and the 2030 Framework
Resolution 06-NQ/TW established national urbanisation targets, exceeding 50 per cent by 2030, from approximately 41 per cent today, alongside new policy requirements for land use, urban planning, and renewal approvals. The urban economy is targeted to contribute 85 per cent of GDP by 2030, against approximately 72–75 per cent today.
Two flagship schemes illustrate the ambition. Thu Thiem New Urban Area, a 657-hectare precinct in Ho Chi Minh City, is being built as HCMC’s new central business district, incorporating the Vietnam International Financial Centre (VIFC, launched February 2026), a new administrative building (groundbreaking April 2026), metro connections, and a residential and commercial pipeline. North Hanoi Smart City (USD 4.2 billion, 270 hectares, led by Sumitomo/BRG, broke ground August 2025) demonstrates what integrated city renewal looks like when a foreign partner with precinct planning expertise leads the design and delivery of a large-scale scheme. Both create the benchmark for what community benefit, government approval, and private capital can achieve together in Vietnam’s two largest cities.
Beyond these flagship precincts, a second tier of renewal activity is taking shape at the district and ward level across multiple cities. Old apartment blocks in inner Hanoi, Ba Dinh, Hoan Kiem, Hai Ba Trung, are being assessed for redevelopment under district masterplans that have received central government approval. In HCMC, southern and eastern districts adjacent to Thu Thiem are being rezoned to accommodate higher-density residential and mixed-use construction. For Australian property groups, this second tier represents a more accessible entry point than flagship precincts, with smaller land assembly requirements, shorter approval timelines, and lower capital thresholds to include a foreign partner meaningfully in the scheme.
What Urban Renewal Offers Australian Property Firms: Ownership, Entry, and Key Benefits
Foreign participation is permitted under the Housing Law 2023 and the Land Law 2024. Foreign individuals and foreign-invested enterprises access residential assets through a 50-year land use right certificate, renewable once for a further 50 years, not freehold title, but sufficient tenure to secure long-term financing and preserve asset value across a full redevelopment cycle.
The 30 per cent foreign cap applies to units in any single apartment building, a constraint that shapes joint-venture sales structure rather than overall scheme viability. Overseas Vietnamese receive near-equal rights to domestic residents under the 2024 Land Law, with no foreign cap applying: a distinction that affects joint-venture partner structuring and the addressable buyer pool for completed buildings.
For Australian property developers evaluating entry, the CPTPP agreement provides investment protection and dispute resolution access not available to investors from non-signatory countries. The approval timeline for foreign-invested real estate companies, from initial site approval to presale licence, runs 18 to 36 months, depending on scheme complexity and city authority workload. Understanding this time requirement is essential for capital planning.
The key benefits of early entry are access to underpriced inner-city land, long-term tenure security under the land use right framework, and established precedent from Australian firms already active in the market. Experts say the window of entry before a broader wave of foreign capital follows the lead of Japanese and Korean investors is still open, though not indefinitely.
Four entry structures are available:
- Joint venture with a local property group: The most common route. Local partner provides land access, regulatory relationships, and sales distribution; the Australian party contributes design expertise, construction management, and capital.
- Development management contract: Fee-based engagement managing design and delivery on behalf of a local property group. Suitable for builders and project management specialists entering without equity exposure.
- Foreign-invested enterprise with land lease: Establishing a local legal entity to lease land from the state, suited to commercial and mixed-use assets.
- Fund and co-investment: Access to urban property returns through private equity vehicles and the VIFC framework. Real estate FDI into Vietnam reached an estimated USD 5–6 billion in the first half of 2025, and Australian institutional capital is increasingly active in this channel.
Each structure offers different benefits in terms of control, capital commitment, and time to return. The right choice depends on existing local relationships, asset class preference, and risk appetite.
Contact Viettonkin for further consulting on Vietnam urban renewal entry strategy, joint-venture structuring, People’s Committee engagement, compensation and resettlement planning, and land use right frameworks for Australian property firms.
