The Vietnamese real estate market has seen nearly a doubling of unsold properties over the past year, with increasing cases of homeowners selling their properties due to an inability to manage rising loan interest rates. The combination of high housing prices and interest burdens has dampened buyer demand, leading to a simultaneous increase in unsold inventory from developers and urgent sales from existing homeowners.
According to a third-quarter real estate market report from Vietnam's Ministry of Construction, cited by local media VnExpress on October 20, unsold inventory has risen in 27 out of 34 regions nationwide. The total number of unsold homes and land held by developers has reached approximately 51,950 units, a 94% increase from 26,717 units during the same period last year.
The inventory includes 15,319 apartments, 17,089 individual houses, and 19,542 plots of land. Notably, the land inventory has surged by 75% compared to the previous quarter. While nationwide real estate transactions exceeded 92,000 during the same period, this figure represents an 8% decline from the previous quarter. The sluggish sales are particularly evident in specific regions. According to real estate consulting firm DKRA, only 119 out of 8,324 land plots supplied in Ho Chi Minh City and the neighboring Dong Nai and Tay Ninh regions were sold in the third quarter, resulting in a sales rate of just 1-2%. Sales rates for townhouses and villas were at 7%, while apartments stood at 26%.
Loan Rates Reach 16%: Homeowners Forced to Sell
As unsold inventory rises, existing homeowners are facing increased financial burdens. The expiration of preferential interest rates on home loans has led to a significant rise in monthly principal and interest payments. A 30-something resident of Ho Chi Minh City, identified as A, borrowed about 24 billion dong (approximately $1.236 million) three years ago to purchase a 72-square-meter apartment. Initially benefiting from a 0% preferential interest rate for the first two years, A's rate increased to 12.3%, causing monthly payments to balloon to 35 million dong (about $1,800). With a combined monthly income of 60 million dong (around $2,900), the couple decided to sell their home to repay the loan.
Another homeowner, identified as B, has listed an apartment valued at 120 billion dong (approximately $6.18 million) for sale. The interest rate on a 60 billion dong (about $2.9 million) loan has risen to 11.6%, resulting in monthly interest payments of about 58 million dong (approximately $2,900).
According to DKRA, the variable interest rates for home loans at 11 banks range from 14% to 16%, depending on the conditions. As the loan burden increases, some sellers have reduced their asking prices by 15-20%, with listings in the online real estate market showing discounts of 30-40% from initial asking prices.
“Many People Lack Homes, So Why the Unsold Inventory?”: Mixed Reactions from Locals
In Vietnam, opinions vary regarding the reasons behind the increase in unsold properties. Many point to high housing prices and a supply structure that does not align with actual housing demand. One commenter noted, “There are many unsold homes and plots, yet many people cannot afford to buy. Isn’t the real estate price excessively high compared to average income?”
Another commenter remarked, “In the past, people bought land expecting prices to rise, but now they carefully consider surrounding infrastructure when purchasing homes. Properties without schools, hospitals, or good transportation links are likely to remain unsold for extended periods.”
Conversely, some believe there is still demand for properties in desirable locations with good living conditions. One user shared, “My family and I visited several properties, and those already inhabited with amenities were selling well.”
Experts also emphasize the need to improve the supply structure, which is currently focused on high-end housing. Huynh Phuc Nghia, director of the Economic, Legal, and Management Center at Ho Chi Minh City University, stated, “The current unsold inventory is primarily concentrated in high-end properties intended for investment.” Additionally, the Ho Chi Minh City Real Estate Association (HoREA) has urged developers to adjust selling prices and expand the supply of affordable housing for actual buyers, even if it means lowering profitability.
* This article has been translated by AI.
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