HOME LOAN INTEREST RATES OF 13–15%: A TEST OF PURCHASING POWER AND REAL ESTATE DEVELOPMENT STRATEGIES IN LATE 2026

1. Vietnam’s Real Estate Market in Late 2026: Weakened Purchasing Power and Slower Liquidity

Housing demand does not necessarily translate into purchasing capacity. As borrowing costs rise, buyers may postpone transactions, continue renting, or shift toward lower-value properties.

According to data from the Ministry of Construction, approximately 100,005 real estate transactions were recorded in Q2 2026, down 28.5% quarter-on-quarter (QoQ) and 36.3% year-on-year (YoY). Inventory across 25 of the 34 localities that reported data reached 39,284 units, lots, and land plots. Condominium inventory increased by 22.2%, while landed housing inventory rose by 46.4% compared with the previous quarter.

In Q3, a DXS-FERI research report cited by PHS recorded a 54% decline in new supply and a 36% decline in sales compared with the same period last year. Recorded price adjustments ranged from 5% to 20% compared with the previous quarter. In Hanoi, CBRE data cited by VTV showed that condominium sales fell 33% QoQ and 66% YoY, while asking prices for secondary-market apartments declined 5% QoQ and 8% YoY.

These figures reflect pressure on market activity but are not sufficient to conclude that prices are falling across the entire market. The key issue is that newly launched supply does not necessarily translate into a corresponding level of transactions, particularly when purchasing power is affected by borrowing costs.

Sources: [Ministry of Construction] | [Dân trí] | [PHS] | [VTV]

2. Key Figures Highlighting Pressure on the Real Estate Market

A Q2 2026 survey by VARS-IRE covering 10 commercial banks found that promotional home loan rates generally ranged from 8.5% to 11% per year, typically applicable for the first 6–12 months. After the promotional period, floating interest rates generally ranged from 13% to 15% per year, with a spread of approximately 3.3–3.5% added to the base or reference interest rate. Actual rates vary depending on each bank’s lending policy and the terms of the loan agreement.

In 2025, many loan packages offered by state-owned commercial banks featured promotional rates of approximately 5.5–6.7% per year during the first 12–24 months. A higher interest-rate environment means buyers need to assess both upfront costs and their debt-servicing obligations after the promotional period ends.

For a VND 2 billion outstanding loan balance, an increase in the interest rate from 9% to 13% per year would raise annual interest expenses by approximately VND 80 million, assuming the principal balance remains unchanged. This is an illustrative calculation and excludes principal repayments, lending fees, and changes in the outstanding balance.

According to information reported by VnExpress based on DXS-FERI, the absorption rate could fall below 20% under a scenario in which floating interest rates rise to 13–15% per year. The previously cited absorption rate of approximately 40% at interest rates of 10–12% per year could not be sufficiently verified and is therefore not used in this article. The sub-20% figure should likewise be understood as a scenario-based forecast rather than an actual market-wide result.

Sources: [VnExpress – Post-promotional loan rates] | [Nhân Dân] | [VnExpress – Real estate purchasing power]

3. Post-Promotional Interest Rates of 13–15%: A Major Barrier to Home-Buying Decisions

First, interest rates can affect the entire project development chain. Buyers may reduce their borrowing capacity or postpone purchases, slowing down the pace of cash collection. Developers therefore need to proactively adjust investment schedules, sales plans, and working-capital requirements when necessary.

Second, promotional interest rates cannot replace genuine affordability. A support program may reduce a customer’s initial financial burden, but it does not eliminate the risk after the promotional period ends if the total cost of ownership remains beyond the buyer’s financial capacity.

Third, the market is becoming increasingly segmented by price point and product suitability. Properties with appropriate pricing, strong alignment with genuine housing demand, and feasible financing options may have an advantage in reaching buyers. However, it cannot be assumed that every property targeting owner-occupiers will automatically achieve strong liquidity.

Fourth, a decline in supply does not necessarily mean that the market has reached equilibrium. When both new supply and sales decline, developers need to separately monitor inventory levels, actual transactions, and purchasing capacity rather than relying solely on the number of units launched.

Sources: [CafeF] | [PHS]

4. Restructuring Products, Pricing, and Financial Policies

4.1. Market and Product Strategy

Developers need to assess actual purchasing power rather than relying solely on expressions of interest or consultation registrations. Key indicators include mortgage approval rates, the conversion rate from reservations to signed contracts, cancellation rates, and payment progress.

At the feasibility-study stage, developers should simultaneously assess product size, total selling price, target customer income, available equity, and ownership costs. Adjustments to the product mix must remain consistent with planning requirements, legal conditions, and the project implementation schedule.

4.2. Finance and Cash Flow Management

Higher interest rates can simultaneously increase financing costs and extend the time required to collect receivables. Companies should test three scenarios: sales performance in line with the business plan; slower-than-expected absorption; and a stress scenario in which sales decline sharply while financing costs remain elevated.

Key variables to monitor include outstanding debt, actual interest rates, debt-service schedules, actual cash collections, contractor payment obligations, and additional funding requirements. Contracted revenue does not necessarily translate into cash collected. Therefore, cash collection schedules should be assessed alongside construction progress.

4.3. Credit Policies and Sales Strategies

Developers may work with banks to establish interest-rate support programs, but the duration of promotional rates, the formula for calculating post-promotional rates, adjustment frequency, and the responsibilities of each party should be clearly defined.

Market surveys have recorded post-promotional interest-rate spreads of approximately 3.3–3.5%. However, there is insufficient basis to conclude that banks are under a general legal obligation to guarantee a maximum spread of 3.5% or to enter into tripartite agreements under a standardized form. Each commitment should be assessed based on the specific loan agreement and applicable regulations.

5. What Is Shaping Vietnam’s Real Estate Market in Late 2026?

5.1. The challenge is not only the interest rate, but also uncertainty surrounding debt-servicing obligations.

Post-promotional interest rates of 13–15% per year require buyers to carefully assess their long-term repayment capacity. As a result, transparency regarding the interest-rate path may be just as important as the initial promotional rate.

Sources: [VnExpress] | [Dân trí]

5.2. Discounts and interest-rate support cannot fully compensate for limited affordability.

For a VND 2 billion outstanding loan balance, an increase in the interest rate from 9% to 13% would raise annual interest expenses by approximately VND 80 million, assuming the principal balance remains unchanged. The effectiveness of sales policies should therefore be assessed based on actual transactions and cash collected.

Sources: [Nhân Dân] | [CafeF]

5.3. A decline in supply does not mean that the market has reached equilibrium.

DXS-FERI recorded a 54% decline in new supply and a 36% decline in sales year-on-year in Q3 2026. When both supply and sales decline, developers need to separately assess inventory and purchasing power across different market segments.

Source: [PHS]

5.4. Interest-rate risks can spill over into project timelines and capital efficiency.

Slower-than-planned cash collection can increase the duration of capital deployment and put additional pressure on financial obligations. Companies need to closely monitor the gap between projected and actual cash flows.

Source: [VnExpress]

5.5. Use value must go hand in hand with financial feasibility.

A strong location and attractive amenities are not sufficient if the total selling price exceeds the target customer’s affordability. Developers need to evaluate products based on a combination of user needs, selling prices, and total ownership costs.

Sources: [VTV] | [Dân trí]

6. From Leverage-Driven Growth to Value-Based Development

In the long term, property developers need to shift from a mindset focused on maximizing selling prices toward one focused on optimizing absorption and cash flow.

• Pre-feasibility research: Integrate income levels, available equity, borrowing capacity, and ownership costs into the analysis of target customers.

• Financial management: Stress-test cash flows under multiple scenarios involving interest rates and sales velocity.

• Credit transparency: Clearly disclose the duration of interest-rate support, the formula for calculating post-promotional rates, and the obligations of each party.

• Progress control: Link decisions on project launches and subsequent development phases to legal readiness, construction progress, and cash-collection capacity.

• Distinguish cyclical from structural risks: Interest rates may change, but land prices, development costs, legal conditions, and product-market fit also determine long-term competitiveness.

Conclusion

Post-promotional home loan interest rates of 13–15% per year are putting pressure on affordability and may affect real estate liquidity. For property developers, the solution is not simply to increase discounts or extend interest-rate support. Instead, they need to comprehensively review selling prices, product mix, financing structures, and project cash flows.

Future investment decisions should be based on project-specific data and testable risk scenarios. Over the long term, sustainable growth will depend on the alignment between product-market fit, customers’ financial capacity, and developers’ ability to manage capital effectively.