High Interest Rates Reshape the Real Estate Market, Shifting Focus to Selective Investment

Despite robust economic growth, accelerating public investment, and the rollout of new policy measures, capital flows have continued to shift toward properties with transparent legal status, strong owner-occupier demand, and sustainable long-term value.

Vietnam's real estate market in the first half of 2026 evolved against the backdrop of an economy showing strong positive momentum. GDP expanded by 8.18% during the first six months of the year—the highest first-half growth rate in years. Meanwhile, registered foreign direct investment (FDI) reached USD 34.7 billion, and public investment disbursement totaled VND 356.935 trillion. Together, these factors provided a solid foundation for investment, industrial production, and infrastructure development.

Selling prices across most real estate segments increased in the first half of 2026 compared with the same period last year. Source: DXS-FERI

However, according to a market report by the Real Estate Services Joint Stock Company (DXS) through its Institute for Economic, Financial and Real Estate Research (DXS-FERI), the broader picture of Vietnam's real estate market points to a different trend. Persistently high borrowing costs have significantly altered buyer sentiment, pushing the market into a more pronounced phase of selection than in previous years.

Notably, mortgage lending rates have generally ranged from 12% to 14% per annum, while many floating-rate loans have risen to 15%–16% per annum after their initial preferential periods. The sharp increase in financing costs has prompted both owner-occupiers and investors to exercise greater caution before making purchasing decisions.

Unlike the period of rapid market expansion, when many investors relied heavily on financial leverage in pursuit of short-term gains, the current environment is directing capital toward assets with intrinsic value and stronger resilience to market risks. Reflecting this shift, DXS-FERI chose "From Segmentation to Selective Investment" as the central theme of its market report for the first half of 2026 and outlook for the second half of the year.

Infrastructure and Policy Continue to Support the Market, While Capital Becomes More Cautious

One of the market's key bright spots during the first half of 2026 was the government's continued acceleration of large-scale public investment. Numerous major infrastructure projects were either launched or fast-tracked, including Ho Chi Minh City's metro network, the Can Gio Bridge, Phu My 2 Bridge, the Rach Chiec National Sports Complex, as well as several large transportation projects in Hanoi and other provinces.

According to DXS-FERI, the continued development of integrated infrastructure will remain a key driver of property value appreciation in areas that directly benefit from urban planning and improved transport connectivity. Over the medium to long term, infrastructure investment is expected to remain one of the market's fundamental growth catalysts.

At the same time, several new regulatory measures have come into effect to improve market transparency. Effective March 1, 2026, Vietnam officially implemented a nationwide real estate identification code system, under which each property is assigned a unique digital identification code for management, record-keeping, and transaction verification purposes.

The new identification system is expected to help reduce information fraud, improve the transparency of transaction histories and transfer prices, and streamline administrative procedures related to property registration, title issuance, and asset management.

Interest rates rose sharply and remained elevated throughout the first half of 2026. Source: DXS-FERI

In the residential sector, the development of social housing and rental housing continued to gain momentum. In Ho Chi Minh City alone, 13 developers have registered plans to develop nearly 97,900 rental housing units. The city has also set a target of building an additional 50,000 social rental housing units between 2026 and 2030 to meet the growing demand from workers and urban residents.

While these developments provide additional support for the market, DXS-FERI believes they are insufficient to offset the impact of elevated financing costs. With mortgage lending rates remaining in the 12%–14% range, homebuyers have become significantly more cautious in their purchasing decisions.

Buyers are now evaluating not only their repayment capacity but also a property's legal status, construction progress, the developer's credibility, and its long-term utilization potential. As a result, speculative properties or those relying solely on expectations of future price appreciation are finding it increasingly difficult to attract buyers.

The Market Enters a More Selective Phase, Prioritizing Intrinsic Value

According to DXS-FERI, the most notable development in Vietnam's real estate market during the first half of 2026 was not the performance of individual segments, but the shift in capital allocation and investor behavior.

New property launches increased by approximately 16% year-on-year during the first half of 2026, reflecting developers' continued efforts to bring new projects to market. However, compared with the second half of 2025, new supply declined by around 44%, indicating that developers also proactively adjusted their project development plans amid market liquidity that has yet to fully recover.

Meanwhile, supply in the secondary market became more abundant as numerous projects were completed and handed over during 2026. This provided buyers with a wider range of options while intensifying competition among projects.

Real Estate Absorption Rate in the First Half of 2026. Source: DXS-FERI

According to industry experts, the market is no longer competing on the volume of products but rather on project quality, legal transparency, construction progress, and sales policies.

In practice, the number of investors relying heavily on financial leverage has declined significantly. Instead, owner-occupiers and investors with stable cash flow now account for a larger share of market transactions. They tend to prioritize properties that can generate rental income, meet immediate occupancy needs, or are located in areas benefiting from ongoing infrastructure development.

This trend has also prompted real estate developers to adjust their business strategies. Rather than focusing primarily on sales volume, many developers are placing greater emphasis on product quality, legal compliance, construction progress, and financial support programs designed to ease buyers' payment burdens.

According to DXS-FERI, the current market reflects a restructuring process following years of rapid expansion. As capital becomes increasingly selective, the market is expected to see higher-quality supply while strengthening the position of developers with solid financial capacity and transparent legal foundations.

Against the backdrop of sustained macroeconomic growth, continued acceleration of public investment, and an increasingly well-developed infrastructure network, Vietnam's real estate market continues to hold strong medium- and long-term growth potential. However, success will no longer depend on the ability to capitalize on short-term price surges, but rather on identifying projects that offer genuine utility, sustainable cash-flow potential, and long-term benefits from urban planning and infrastructure development.

Therefore, the theme "From Segmentation to Selective Investment" not only reflects the market's performance during the first half of 2026 but also highlights an emerging investment trend. As financing costs remain elevated and market liquidity has yet to fully recover, the real estate market is expected to undergo further consolidation, with greater emphasis on high-quality developments that better meet genuine end-user demand in the period ahead.

Source: VnBusiness | Business Magazine