When several hundred supporters of LGBT rights took to the streets of Ho Chi Minh City last weekend, one could have been forgiven for fearing the worst.

Strutting down Nguyen Hue pedestrian mall in drag and making a beeline for City Hall seemed a pretty good way to attract unwanted attention from the strip's security police.

A plethora of rainbow flags threw the monotony of the city's ubiquitous hammer-and-sickle banners into sharp relief.

In April, the colour and ceremony on Nguyen Hue had been for a more predictable occasion: the 40th anniversary of the fall of Saigon and the unveiling of a new statue of Vietnam's revolutionary hero, Ho Chi Minh.

But fears of a crackdown quickly evaporated. Indeed, for a while, Nguyen Hue felt a bit like a LGBT Disneyland.

Children pestered parents for photos with drag queens, the parade a movable pin cushion of selfie sticks, and even the green-uniformed police contingent appeared more amused than confronted.

Participants and spectators have their photographs taken during the Viet Pride Rainbow Walk. ( ABC freelance contributor: Matthew Clayfield )

In fact, the Communist nation may well have been witnessing an expression of the new normal: just two months ago, 5,000 people converged in the same place in the wake of the US Supreme Court decision to legalise same-sex marriage.

With the Philippines considering a ban on same-sex marriage, Singapore's legal system upholding a law prohibiting same-sex activities of any kind and Brunei's penal code recommending whipping and long prison sentences for same-sex couples, Vietnam, one of the region's most repressive countries, was suddenly looking, at least on one point, like one of its most progressive.

Lieu Anh Vu, a Hanoi-based human rights worker who flew into town for the march, said the event showed the extent to which Vietnam was becoming a regional leader on LGBT issues.

"Such public expressions of LGBT identity are being challenged throughout South-East Asia," the 23-year-old said.

"Pride events have continuously been shut down in Shanghai and Beijing, too.

"What's important is that we were able to march on the street and publicly show our identity and express ourselves.

"I'm proud to be living in Vietnam at this time and witnessing such a dramatic change."

The Rainbow Walk, as the march was known, was the crowning event of Ho Chi Minh City's third annual Viet Pride festival, held over three days and organised by the LGBT advocacy group, Information Collecting and Sharing (ICS).

The organisation also helps to coordinate similar events in 23 other provinces throughout the country.

ICS director Tran Khac Tung described this year's festival as "our most successful yet", with 5,000 people attending workshops, film screenings and parties.

"The authorities have been supportive of our events ... as well as of LGBT rights in general," Mr Tung said.

At the beginning of this year, Vietnam abolished regulations that "prohibit marriage between people of the same sex".

It means that same-sex unions can now take place without anyone being prosecuted. They attracted heavy fines until two years ago.

This is not quite as groundbreaking as it sounds: the government still does not recognise same-sex marriages and there remains no legal framework for issues including the division of a couple's assets in the case of separation or death.

A rainbow flag is displayed proudly during the Viet Pride Rainbow Walk. ( ABC freelance contributor: Matthew Clayfield )

Nevertheless, things appear to be changing in this deeply conservative society.

Fifteen years ago, it was illegal for same-sex couples to co-habitate, let alone formalise their relationship, and homosexuality was still on the country's official list of mental illnesses.

When it was finally removed from that list, the state-run media took to describing it as a "social evil" instead.

But over the past couple of years, the rhetoric has changed. Justice Minister Ha Hung Cuong, whose department has reportedly been one of the more progressive on the issue, has stated publicly that it is "unacceptable to create social prejudice against the homosexual community".

According to Mr Tung, perceptions surrounding the LGBT community are changing for the better as a result.

He cited a survey conducted 18 months ago by Vietnam's Health Strategy and Policy Institute, which showed that 34 per cent of respondents supported same-sex couples' right to marry, 56 per cent their right to adopt children and 51 per cent their right to inherit property.

Two years earlier, 87 per cent of respondents said they believed that homosexuality was a transmittable disease and 48 per cent that it could be cured.

Mr Tung said state-media coverage of high-profile same-sex couples today — including US ambassador to Vietnam Ted Osius — had helped contribute to changing attitudes.

As a result of this apparent trickle-down tolerance, Mr Tung said "LGBT people feel more confident about themselves".

An online survey of more than 3,000 LGBT people conducted last year revealed that 78 per cent of respondents had come out to at least one or two people. In 2008, only 2 per cent had done so.

"I had been lying to my parents every time they had asked me, so one day I just decided to stop lying," Mr Vu said.

"I told them the truth. My friends took it better than my family."

He said it was important to remember that while acceptance was improving in a general sense, it was not uniform across all demographics.

"Urban centres are more exposed to LGBT people and younger people also tend to be more open-minded," Mr Vu said.

"My parents were not happy with my announcement and are still not very happy now."

One of the many faces in the crowd at the Viet Pride Rainbow Walk through Ho Chi Minh City. ( ABC freelance contributor: Matthew Clayfield )

Some critics have argued that the government's recent moves are a cynical and self-serving play for LGBT tourism dollars.

Others say they are an attempt to distract from the regime's ongoing war against dissident bloggers by pointing to the pride events as examples of freedom of speech and assembly.

But Human Rights Watch LGBT advocacy director Boris Dittrich is more positive, declaring: "Vietnam is an interesting country. A respectful debate about marriage equality has started. It's also encouraging to see how active the country's civil society groups are.

"Legal changes still need to take place. For instance, a non-discrimination law that includes sexual orientation and gender identity. Marriage equality has been debated, but no legislation has been proposed by the government."

Dy Khoa was one of the marchers last weekend and he is aware of the debate about same sex marriage in Australia.

Recently, senior Government ministers in Canberra argued that Australia should not legalise same-sex marriage because it would put the country out of step with many of our Asian neighbours.

"Vietnam has only started this process," Dy Khoa said.

"We still have a long way to go. But Australia? A modern country? Why are they so scared? I can't understand it."