Rising prices and mortgage rates threaten the market

Experts forecast that house prices in Vietnam will continue to stay elevated while mortgage interest rates have yet to ease — two major issues raising questions about the pace and sustainability of the recent recovery.

- By Bich Ngoc

According to a report released last week by the Vietnam Association of Realtors (VARS), Vietnam's real estate market is gradually emerging from its trough and moving closer to stability, supported by an improvement in supply. However, the recovery process continues to face several structural impediments.

Chief among these is the persistently high price level, coupled with interest rate pressures that have yet to fully ease, limiting the depth and sustainability of the market's recovery.

Data from 2025 indicates that the market recorded around 128,000 newly launched units nationwide, the highest level since 2019.

Nevertheless, the VARS notes that an increase in supply does not necessarily translate into improved housing affordability, as selling prices have continued to rise, far exceeding the purchasing power of genuine end-users, particularly in major urban centres.

The most significant risk remains the prolonged mismatch between supply and demand. Affordable housing remains scarce, while the bulk of new supply is concentrated in high-end apartments and high-value landed properties.

Notably, around one-quarter of the current apartment supply is priced at over VND100 million ($3,800) per square metre, largely coming from a small number of major developers. This supply structure leaves little room for price adjustments, even as overall supply improves markedly.

According to the VARS, property prices in major cities have far outpaced average income levels, while mortgage interest rates continue to weigh on both homebuyers and developers. End-users are increasingly required to have strong financial foundations and long-term savings capacity, while profit margins for investors are steadily narrowing.

Data from the Ministry of Construction also indicates that in 2025, apartment prices continued to rise sharply, commonly increasing by 20-30 per cent on-year, with some areas recording growth of more than 40 per cent.