Bồ Xuân Hiệp

HCM CITY — Việt Nam’s real estate market is entering a decisive reset, as rising interest rates and tightening credit conditions bring an end to years of speculative land trading and force a shift towards more sustainable investment models.

Mortgage rates now range from around 9.6-10 per cent during promotional periods and can rise to 13-15 per cent thereafter, increasing holding costs and curbing speculative demand, according to industry experts.

At the “Việt Nam Real Estate Market 2026: Positioning Strategic Assets Amid Volatility” seminar held in HCM City on Thursday, co-hosted by the Vietnam National Real Estate Association and DKRA Group, policymakers and analysts described the current phase as a “harsh but necessary” restructuring of the market.

Land speculation fades

For much of the past decade, Việt Nam’s property boom was driven by subdivided land plots, particularly in peri-urban areas, fuelled by easy credit and retail investor demand.

That model is now losing traction.

Võ Huỳnh Tuấn Kiệt, senior executive at CBRE Vietnam, said the market is witnessing “the end of the land subdivision era,” especially for loosely regulated segments such as agricultural or forest land marketed as resort property.

“These products will quickly lose liquidity as asset identification policies tighten,” he said, citing stronger legal enforcement and increasing scrutiny of speculative developments.

The withdrawal of easy money is exposing highly leveraged projects and those lacking clear legal status, accelerating a market-wide shakeout.

As land speculation recedes, apartments are expected to remain the core of Việt Nam’s urban property market, experts at the forum said, supported by strong end-user demand and clearer legal frameworks.

However, analysts cautioned that rising borrowing costs and affordability pressures could temper demand, particularly among first-time buyers, even as supply continues to recover.

Higher rates reshape investment

At the heart of the restructuring is a fundamental shift in Việt Nam’s financial conditions.

Trần Đình Thiên, a member of the Prime Minister’s policy advisory council, said the scope for monetary easing has narrowed, making higher interest rates in 2026 “inevitable”.

A one-percentage-point rise in interest rates could increase annual borrowing costs across the economy by approximately VNĐ184 trillion (US$7.3 billion), including around VNĐ47 trillion for the real estate sector alone, he said.

This has created a “pincer effect” on the market, with higher financing costs coinciding with structural shifts in supply and demand, compressing margins and forcing investors to reassess strategies.

Shift toward capital markets

The tightening credit environment is also exposing structural weaknesses in Việt Nam’s funding model, which has long relied heavily on bank lending.

Experts at the forum said the current model is no longer sufficient to support long-term growth, particularly for capital-intensive sectors such as real estate and infrastructure.

They called for a shift towards capital markets, including corporate bonds and investment funds, to provide more stable and transparent sources of funding.

Such a transition would reduce pressure on the banking system while encouraging stronger financial discipline among developers.

While residential property undergoes restructuring, other segments are gaining traction.

Industrial and logistics real estate are attracting increasing investment as Việt Nam strengthens its role in global supply chains, particularly in semiconductors and renewable energy.

Meanwhile, the resort property segment is being reshaped, with a stronger focus on legal clarity and sustainable value following years of speculative expansion.

Tougher conditions ahead

The new cycle presents a more demanding environment for both developers and investors.

Companies are being forced to restructure financing and improve transparency, while investors are shifting away from short-term speculation towards longer-term strategies.

“2026 will be a period of harsh elimination,” Kiệt, senior executive at CBRE Vietnam, said, warning that projects lacking strong legal foundations or clear value propositions will struggle to survive.

Despite near-term pressures, analysts remain optimistic about Việt Nam’s long-term prospects.

Stable inflation, solid economic growth and ongoing legal reforms, including efforts to resolve more than 1,200 stalled projects, are expected to support a gradual recovery.

The market, they said, is not in decline but transitioning into a more mature phase, where success will depend on identifying assets with real demand, sustainable cash flow and long-term strategic value. — VNS