Hanoi or Phuket: Where Should You Invest Capital in 2026?

Singapore's Keppel is pouring hundreds of millions of dollars into Hanoi's residential sector. Apartment prices in Vietnam's capital have jumped 40-50% over the past two years, and a major regional player is racing to secure position before the next leg up. But for an international investor accustomed to Thailand, an obvious question follows: is it worth chasing the Hanoi hype, or does Phuket remain the smarter entry point?

The answer is less clear-cut than it seems. Vietnam attracts capital through scale and rapid urbanization. Thailand competes on transparency, rental yields, and mature tourism infrastructure. Let's break down both markets through concrete numbers.

Quick Answer

• Hanoi: average new-build price has reached $3,000-4,500 per square meter in central districts (Savills Vietnam, Q1 2026). Prices rose over 40% in 2024-2025.

• Phuket: condominium prices in resort locations run $3,500-6,000 per square meter, with rental yields holding steady at 6-8% annually (CBRE Thailand); some short-term rental listings report gross yields of 7-10% before expenses (AIProperty Phuket guide, 2026).

• Foreigners cannot own land or houses in Vietnam. The maximum ownership term for a non-resident on an apartment is 50 years, renewable.

• In Thailand, a foreigner can hold freehold title on a condominium within the building's 49% foreign quota, with no time limit.

• Keppel is investing in Hanoi not for quick speculative gains but for arbitrage: Vietnamese prices remain 3-5 times lower than Singapore's.

• For an international investor, Phuket offers a simpler legal structure, direct access to hard-currency rental income, and a clearer exit path, plus fresh developer confidence: Sansiri alone is targeting roughly 40 billion baht of new Phuket projects through 2027.

Key Facts

• Keppel Ltd (formerly Keppel Land) is expanding its portfolio in northern Vietnam, betting on housing shortages in Hanoi, where the population has surpassed 8.5 million (General Statistics Office of Vietnam).

• New apartment supply in Hanoi totaled fewer than 15,000 units in 2025, against estimated annual demand of 40,000-50,000 units (JLL Vietnam). Cushman & Wakefield projects future apartment supply rising from roughly 440,000 units across 710 projects in 2025 to about 760,000 units across 1,150 projects by 2035, concentrated more than 30 km outside the city core.

• Phuket recorded a record 9.8 million international arrivals in 2025, sustaining strong short-term rental demand.

• Average short-term rental income on a Phuket condominium via Airbnb and Booking runs $1,800-2,500 per month during peak season (AirDNA).

• Vietnam imposes a 5% rental income tax plus 5% VAT on individuals. Thailand's rate is progressive, but effective tax burden under proper structuring is broadly comparable.

• The Vietnamese dong lost roughly 8% against the dollar in 2024-2025. The Thai baht weakened only 3-4% over the same period, holding a more stable currency profile.

• Secondary market liquidity in Hanoi is notably lower than in Phuket: average time to sell an apartment in Vietnam is 8-14 months, versus 4-8 months for well-located Phuket properties. Developers like Sansiri are shifting focus toward beachside zones such as Bang Tao, Surin, Nai Yang, Karon, and Rawai from 2027, which should further support liquidity in prime locations.

FAQ

Why is Keppel choosing Hanoi over Thailand?

Keppel has historically concentrated on Vietnam and China, operating in Ho Chi Minh City since the 1990s. Hanoi is a logical extension within an already familiar market. For Keppel, the main driver is supply shortage combined with a rapidly growing middle class.

Can a foreigner buy an apartment in Hanoi?

Yes, but with restrictions. Ownership term is capped at 50 years, and the number of foreign owners in a single project is limited to 30% of total units. Resale is possible only to another foreigner or a Vietnamese citizen.

How does Hanoi's rental yield compare to Phuket's?

In Hanoi, gross yield runs 3-5% annually. In Phuket, working with a hotel operator can deliver 6-8%, with some short-term listings reporting 7-10% gross before expenses. The gap reflects Hanoi's high per-square-meter prices against relatively modest local rental rates.

What are the risks of investing in Vietnamese real estate?

Three stand out: the limited ownership term (50 years), weak secondary market liquidity, and dong currency volatility. Regulatory unpredictability is also a factor; Vietnam introduced temporary restrictions on developer lending back in 2023.

Is Phuket overheated after the post-pandemic boom?

The luxury villa segment is indeed showing signs of slowing price growth. But the condominium segment priced at $100,000-250,000 remains undersupplied. Tourist arrivals keep climbing, and new supply is entering the market more slowly than in 2019. Market commentary for 2026 also notes buyers are becoming more selective, favoring quality, prestige locations, and solid legal structuring over volume alone.

How does an international investor start buying in Phuket?

The process typically takes 4-8 weeks: selecting the property, verifying legal title, signing the contract, and transferring funds from abroad while obtaining a FET (Foreign Exchange Transaction Form). Without this form, the Land Department will not register freehold title.

Do I need to visit Thailand in person to buy?

It's advisable. For a reconnaissance trip, book a hotel near the projects of interest and spend 3-5 days reviewing key locations. A power of attorney allows the deal to close remotely, but an in-person inspection significantly reduces risk.

What's the minimum budget to enter the Phuket market?

Starting from 3.5-4 million baht (roughly $100,000) for a studio or one-bedroom condominium in areas like Bang Tao, Laguna, or Rawai. Beachfront properties in premium locations such as Surin or Kamala start from $200,000.

Which is more profitable over a 5-year horizon, Hanoi or Phuket?

Hanoi could deliver higher capital appreciation if urbanization trends continue. But given ownership restrictions, currency risk, and thin liquidity, the risk-adjusted return for a foreign investor in Phuket looks more attractive. A steady dollar-denominated rental stream and the option of unrestricted freehold ownership are two compelling arguments in its favor.

For an international investor weighing entry points into Southeast Asian real estate, Phuket keeps the best balance between yield, legal protection, and operational simplicity. Hanoi is compelling as a speculative bet, but it demands a deep understanding of local law and a long investment horizon.

Source: Bangkok Post

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