Why Hanoi has the highest cost of living in Vietnam

Hanoi has the highest cost-of-living index in Vietnam, according to the Statistics Office (Ministry of Finance) release on the spatial cost-of-living index (SCOLI) for 2025. The SCOLI compares prices of everyday goods and services across regions and localities, and Hanoi leads among provinces and centrally governed cities.

SCOLI methodology and 2025 results

The spatial cost-of-living index (SCOLI) is compiled for six economic-social regions. It compares prices of five regions with the Red River Delta region and is calculated for 34 provinces and centrally governed cities, with 33 localities compared to Hanoi.

In the 2025 survey results, the Red River Delta region remains the area with the highest cost of living. Within provinces and cities, Hanoi continues to be the leading locality. The Red River Delta region, with Hanoi at its core, recorded the highest SCOLI in 2025.

Why the Red River Delta—and Hanoi—has the highest cost of living

The Statistics Office attributes the high SCOLI in the Red River Delta to its role as the northern economic hub and the political-administrative center of the country, with Hanoi as its nucleus. The region is also a major trade hub, connected to northern provinces and international markets through relatively integrated transport infrastructure.

It also concentrates many industrial zones and export processing zones, while serving as a center for services, education, healthcare and science and technology. This attracts a large workforce from other localities, contributing to higher demand in the local economy.

Other factors highlighted include stable economic growth, high population density and rapid urbanization, which together keep living costs high—mainly in Hanoi. The region’s consumption structure also places heavier weight on services such as rental housing, healthcare, education and dining out.

Housing, education and healthcare pressures

Housing and land prices in Hanoi and central urban areas rose due to limited land supply while demand remained high, pushing up rents and overall living costs. In addition, the high cost of education and healthcare services concentrated in the area contributes to the SCOLI being higher than in other regions.

Input costs in large cities—such as rent for premises, labor costs and service costs—are also higher, increasing production, business and supply costs and influencing consumer price levels.

Price differentials and market factors

The Statistics Office notes that the 2025 SCOLI shows relatively small price differentials across regions and localities. Higher prices are mainly concentrated in large economic centers where urbanization is rapid and demand is high, while regions with advantages in staples and living costs maintain lower price levels.

It also points to the development of distribution systems, logistics and e-commerce, which have helped improve market transparency, increase competition and narrow price gaps between regions. The Statistics Office links this to the effectiveness of price governance, supporting balanced supply and demand for essential goods and services and contributing to price stability nationwide.

What SCOLI measures

The spatial cost-of-living index (SCOLI) is a relative indicator (expressed as a percentage) reflecting price differences of everyday goods and services among provinces and centrally governed cities across regions over a given period (usually one year).

SCOLI is used to support policy development in economic and social development, assess results of poverty reduction policies, wage subsidies and other supports, and provide a basis for calculating the Human Development Index (HDI) and Gross Regional Domestic Product (GRDP) by purchasing power parity.