High interest rates and restructuring in the real estate market.

High interest rates erode profits, and a wave of stop-loss selling is increasing.

The continuous increase in deposit interest rates during the first half of 2026 has led to a rise in mortgage interest rates, making the cost of capital the biggest pressure for both homebuyers and real estate investors.

According to MBS Research, in the second quarter of 2026, deposit interest rates at many banks increased by approximately 1-1.5 percentage points compared to the previous quarter. This pushed lending interest rates up to a common range of 13%-14% per year. Although many developers implemented interest rate support programs of 7%-8% for the first two years to stimulate demand, liquidity has not improved significantly as investors are concerned that high interest rates will persist until the end of the year.

Sharing the same view, One Mount Group stated that mortgage interest rates have continuously increased in the first six months of the year and show no signs of cooling down. With floating interest rates at 11%-14% per year, buyers are becoming increasingly cautious about using financial leverage. According to their survey, up to 40% of customers no longer need to borrow to buy a house due to concerns about excessively high interest costs.

According to the Dat Xanh Services Institute for Economic, Financial, and Real Estate Research (DXS-FERI), the prevailing interest rate for real estate loans is 12%-14% per year, while many loans have increased to 15%-16% per year after the preferential period.

This is considered a sufficiently large threshold to significantly alter investment efficiency. Previously, profits from real estate price increases could offset interest costs, but now, the potential for further price increases is no longer as significant as in the 2022-2025 period. When the cost of capital increases faster than the rate of asset price appreciation, profits are significantly reduced, and many investors even experience negative cash flow.

This pressure quickly reflected in market liquidity. According to DXS-FERI, the total absorption of primary real estate in the first six months of the year reached only about 26,100 units, a decrease of 62% compared to the second half of the previous year. The overall market absorption rate fluctuated around 20%-30%, about 30 percentage points lower than the end of 2025.

Behind these figures lies a clear shift in market sentiment. Instead of chasing price appreciation expectations, buyers are beginning to question their ability to repay debt, cash flow, and the actual effectiveness of their investments. Meanwhile, many investors using high leverage are forced to sell their assets to alleviate financial pressure.

Speaking with VietnamFinance, Dr. Chau Dinh Linh from the Ho Chi Minh City University of Banking stated that high lending interest rates are due to the contributing factor of high average input interest rates.

According to him, the group most affected are investors who use high leverage, especially those who own multiple properties at the same time.

"Just a few percentage point increases in interest rates would significantly raise monthly financing costs, leading to increased debt repayment pressure and directly impacting market liquidity," he stated.

According to the expert, as borrowing costs rise, the demand for home loans will gradually decrease, especially among speculators. This weakens liquidity, reduces expectations of price increases, and forces many to choose between continuing to bear the interest payments or accepting a lower price to reduce debt pressure.

In reality, the market has seen many cases where homeowners accept losses of 100-300 million VND per property after the principal debt grace period ends and the floating interest rate period begins.

Where is the money flowing?

If the period from 2022-2025 was a time when capital flows prioritized assets with the potential for rapid price appreciation, the current context is forcing investors to change their strategy.

According to Dr. Chau Dinh Linh, high interest rates will lead to a natural selection process in the market. Investors with low debt ratios and strong financial capacity will still be able to hold assets. Meanwhile, those using high leverage will have to restructure their portfolios, reduce assets, or withdraw from the market.

He argued that high interest rates also have a positive aspect in that they limit speculation based on bank loans. Capital will tend to flow into projects with transparent legal frameworks, reputable developers, and real development potential, rather than simply expecting price increases.

From an investment perspective, Mr. Nguyen Quoc Khanh, Chairman of DTJ Group, believes that the coming period will see a greater focus on maximizing operational efficiency rather than short-term speculation.

According to him, investors should consider allocating their portfolios to segments with growth potential such as industrial real estate, warehousing and logistics, long-term rental housing, or suburban real estate with clear infrastructure and planning.

"These are all segments that have the potential to generate stable cash flow or benefit from infrastructure development trends in the medium and long term, rather than relying entirely on expectations of asset price appreciation," Mr. Khanh told VietnamFinance.

Meanwhile, Mr. Nguyen Vu Cao, Chairman of Khang Land Holdings, believes that the market is entering a phase of strong differentiation among investor groups.

According to him, those who own good assets and use little leverage don't necessarily need to sell, because most have already accumulated significant profits during the previous bull market.

Conversely, groups that rely heavily on borrowed capital need to proactively restructure their investment portfolios, prioritizing the sale of highly liquid assets to reduce debt pressure and maintain cash flow.

In reality, many investors are not selling out of pessimism about the market, but rather due to financial pressure. As floating interest rates rise amid the end of grace periods, reducing assets becomes an option to balance cash flow instead of continuing to bear increasingly large interest costs.

Experts also noted that the market has not completely "frozen." Transactions are still taking place, but mainly involve investors with readily available cash or buyers looking for a place to live.

For this group, the current period presents an opportunity to access more reasonably priced assets after the market correction. However, the use of leverage needs to be strictly controlled. According to Dr. Chau Dinh Linh, buyers should prepare at least 40%-50% of their own capital, and the total monthly principal and interest payments should not exceed 40% of their family income to ensure financial security.

High interest rates are causing the real estate market to shift from a leverage-driven growth phase to one that prioritizes cash flow quality and financial capacity. With profits from price appreciation no longer as readily available as before, capital will tend to seek assets that generate real use value, offer stable exploitation potential, and attract investors with better resilience to fluctuations in the credit cycle.

Source: VietnamFinance