Fluctuations in capital costs and the adaptation challenge for homebuyers.

According to Ms. Mai Thanh Thao, Deputy Director of the Banking and Corporate Services Department at Savills Vietnam, the increase in interest rates in the early part of the year largely stems from cyclical factors in the lending activities of the banking system.

Following the peak disbursement period at the end of the year and the surge in loan demand at the beginning of the year, banks typically review their credit structure and adjust interest rates to balance capital costs and risk appetite. Experts from Savills further analyze that when reaching their allocated credit limits, banks will be more selective in lending, especially in the real estate sector .

This move is seen as an attempt to balance growth targets and risk control, rather than a sudden "brake" on the market.

Ms. Mai Thanh Thao, Deputy Director of Banking and Corporate Services at Savills Vietnam

Market behavior changes when the cost of capital increases.

From a market perspective, when the cost of capital increases, the initial reaction is often caution in major financial decisions. However, this does not mean that demand for real estate disappears. In Ms. Thao's view, the actual demand for housing remains, especially in large cities where urbanization continues. The main change lies in the selection criteria of buyers and investors.

Homebuyers tend to be more cautious about their finances, prioritizing properties that match their income rather than chasing unrealistic expectations like prime locations or high-end amenities. For investors, especially those using high leverage, rising capital costs make the strategy of "holding assets and waiting for price appreciation" riskier as capital costs approach or exceed expected returns.

In this context, investment decisions began to shift towards focusing on the efficiency of asset utilization and cash flow generation, rather than solely relying on short-term price appreciation expectations.

Market liquidity will become significantly differentiated.

One of the most noticeable impacts of a high-interest rate environment is the significant divergence in liquidity between segments. Products heavily reliant on expectations of price appreciation, such as land plots far from the city center, projects with incomplete legal documentation, or high-end products that far exceed actual demand, may face greater pressure.

Conversely, assets linked to actual usage needs or capable of generating stable cash flow tend to maintain better absorption rates, such as mid-range apartments, completed houses in existing residential areas ready for immediate use, medium-sized offices, boarding houses, serviced apartments in areas with real rental demand, and central shophouses with stable tenants. According to experts, as capital costs increase, the market will gradually shift from a speculative model based on expectations of price increases to an investment model based on actual use value and cash flow.

Besides interest rates, the supply-demand structure of the housing market in Ho Chi Minh City is also playing a crucial role in shaping market trends. In recent years, new supply has increased slowly and largely comes from subsequent phases of previously launched projects, indicating that the project development process still needs more time to truly improve.

According to Savills' Q4/2025 data, the average price of primary apartments in Ho Chi Minh City is currently around VND 102 million/m², continuing its upward trend as new supply is mainly concentrated in the mid- and high-end segments. Products priced above VND 110 million/m² account for approximately 56% of the new supply, while the segment below VND 50 million/m² accounts for only about 12%, reflecting a significant shortage of affordable housing in the market.

Strategies for buyers and investors

With persistently high housing prices and a growing scarcity of affordable housing, the trend of buyers shifting to suburban areas and neighboring provinces is expected to become more pronounced in the near future. Areas like the former Binh Duong province or the eastern parts of Ho Chi Minh City are attracting attention due to more accessible prices, along with the development of large-scale urban projects and inter-regional infrastructure connections.

Between 2026 and 2028, the Ho Chi Minh City apartment market is expected to add approximately 58,000 units from 80 projects, with the East area accounting for about 50% of the supply and continuing to play a leading role in the market. However, in the short term, new supply will still mainly come from subsequent phases of existing projects or projects that are being restarted.

For homebuyers using borrowed funds, Savills experts recommend paying particular attention to financial risk management.

First and foremost, buyers need to control the loan-to-value ratio appropriately and should not rely solely on preferential interest rates in the initial period, but must calculate their ability to repay the debt at a variable interest rate after the preferential period ends.

Secondly, priority should be given to assets with practical use value, clear legal status, and the ability to be exploited immediately. These factors not only help reduce risk but also improve the asset's liquidity in the long term.

In addition, maintaining a financial reserve equivalent to at least 6-12 months of debt repayment is also considered an important factor in ensuring financial security in case of fluctuations in interest rates or income.

"In a market that increasingly demands higher financial discipline, investors with a long-term vision and a focus on the practical use value of assets will have more opportunities in the next development cycle of the real estate market ," emphasized a Savills representative.

Communicated by An Huy Group

According to Vietnam Logistics Review Magazine