Vietnam's real estate market is experiencing an imbalance characterized by both increased supply and a slowdown in transactions. In the second quarter of this year, new commercial housing permits rose compared to the previous quarter, signaling an expansion in supply, yet successful transactions fell short of earlier figures. Inventory has also increased across apartments, single-family homes, and land. With high property prices and burdensome loan rates dampening buyer interest, construction companies are taking measures to defend their cash flow through bond issuance, asset sales, and adjustments to sales schedules.
According to local media, including VnExpress, real estate transactions in Vietnam for the second quarter of 2026 totaled 100,105, which is only 71.5% of the first quarter and 63.7% of the same period last year. Transactions for apartments and single-family homes reached 26,567, maintaining only 86.1% of the previous quarter, while land transactions dropped to 73,438, a decrease of 67.4% from the prior quarter.
In contrast to the decline in transactions, supply has rapidly increased. The number of new commercial housing project permits in the second quarter reached 113, totaling approximately 103,205 units, marking a 194.8% increase from the previous quarter and more than tripling compared to the same period last year.
The increase in inventory particularly highlights the weakening absorption capacity of Vietnam's housing market. Among 34 regions, 25 reported project inventories totaling approximately 39,284 units and plots. Apartment inventory rose to 12,823 units, up about 22.2% from the previous quarter, while single-family homes increased to 15,313 units, a 46.4% rise, and land plots grew to 11,148, up 25.4%.
Supply Increases, Transactions Cool
Additionally, price pressures and high financial costs are suppressing buyer activity. According to the Ministry of Construction, the average price of apartments in the secondary market is approximately 12.3 million dong (about $636) per square meter in Hanoi, 10.8 million dong (about $558) in Ho Chi Minh City, and 6.9 million dong (about $357) in Hung Yen. Although land transaction prices have decreased by about 2-3% from the previous quarter, this has not significantly improved accessibility. Real estate loan rates are typically around 12-14% annually, with some variable-rate loans reaching as high as 15-16%.
Changes in the financial environment are also altering how companies secure funding. Data from the Hanoi Stock Exchange indicates that in August, real estate firms issued four bonds, raising approximately 4 trillion dong, with an average issuance rate of 12.2% annually. One major real estate company issued bonds totaling 30 trillion dong in two rounds, with rates of 11% and 12.5%, respectively. Real estate developer Kinh Bac secured 700 billion dong at an initial rate of 12% for a three-year term.
Asset disposals and project transfers are also being utilized as means to secure cash. Real estate group Novaland has completed the transfer of four assets valued at a total of 11.266 trillion dong. This has allowed the company to execute about 72% of its asset liquidation plan, which aims to raise 15.617 trillion dong for debt repayment. The company still holds five assets for sale, four of which, valued at approximately 3.931 trillion dong, have preliminary agreements, but final transfers have not yet been completed.
Buyers are also acting selectively. Data from the Vietnamese real estate platform Batdongsan.com.vn shows that in the second quarter of this year, the interest in purchasing real estate was approximately 37% for apartments, surpassing 23% for land and 22% for single-family homes. In Hanoi, interest in apartments rose from 38% in January to 49% in June, while interest in single-family homes dropped from 26% to 17%.
Unsold Market, Resilient Companies
Industry insiders report that the sluggish transaction volume is directly leading to cost pressures. A sales manager at a real estate brokerage in Ho Chi Minh City noted that transaction volumes have decreased by 70-80% compared to the same period last year. Despite increasing advertising expenses and expanding customer acquisition channels, there were months with no contracts at all. He stated, "If the situation does not improve, brokerages will have to cut costs and reduce staff to maintain operations."
Developers are also focusing more on cash recovery than expansion. A representative from a real estate company in the Ben Thanh area mentioned that they are postponing new project launches and concentrating on completing ongoing projects to expedite handovers and cash recovery. He said, "Currently, recovering funds takes precedence over expanding investments. Given the high interest rates and slower-than-expected sales pace, taking on additional debt is a risky decision."
Market exits are also increasing. According to the General Statistics Office of Vietnam, 1,463 real estate companies completed dissolution procedures in the first half of this year, more than double the number from the same period last year. This averages about 243 companies closing each month.
Experts diagnose that credit and price pressures are becoming key factors determining the resilience of companies. Bo Hong Tang, Deputy General Director of DKRA, stated, "The weakening purchasing power is more clearly revealing the financial pressures on companies with weak capital bases." Le Hoang Chau, President of the Ho Chi Minh City Real Estate Association, noted, "Restrictions on real estate loans from some banks and rapid interest rate increases are putting significant pressure on the market," adding that some companies are facing loan rates adjusted to 19-20% annually.
Meanwhile, the challenges facing Vietnam's real estate market have shifted from a simple supply shortage to a clash of prices, financial costs, product competitiveness, and purchasing power. Companies with ample cash and low debt can afford to wait for recovery, but those reliant on loans and sales revenue must choose to downsize, collaborate, or transfer assets amid prolonged recovery periods.
* This article has been translated by AI.
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