Vietnam's Home Prices Haven't Fallen. Sales Already Have

[Vietnam's Home Prices Haven't Fallen. Sales Already Have]

Vietnam's Ministry of Construction released its second-quarter housing report in late August. Nationwide transactions came in at just 70% of the first-quarter level. Land plots fell the hardest; apartments and detached houses less so. Unsold stock is piling up at the same time: developers' inventory of detached houses rose 46% from the previous quarter, and apartment and land inventory climbed as well.

The ministry's own summary still reads "the market maintains its recovery trend and is basically stable," and it describes the inventory build-up as a "slight increase." When the same report cites market research firms, the tone changes: liquidity keeps falling, absorption rates are low, and developers face pressure on both cash flow and inventory. The report also concedes that resale apartment prices have dropped in several provinces while new-launch prices stay high, widening the gap between what sellers expect and what buyers can pay.

That gap is clearest in Hanoi. According to property consultancy CBRE, only 68% of the apartments launched in Hanoi in the second quarter found buyers, roughly the same as in the first quarter. Two years ago that figure would have looked strange. In 2024 and 2025, absorption in Hanoi regularly topped 90%, and in some quarters buyers took more units than developers launched.

Units aren't moving, but developers aren't cutting. The average price of new apartments in Hanoi rose 12% from the previous quarter. New launches were concentrated in central and near-central districts, mostly priced above VND 120 million per square meter, and for two straight quarters no new project has opened below VND 60 million per square meter. The drop is happening in the resale market. Secondary apartment prices slipped nearly 3% quarter on quarter, the first decline since late 2022.

Once resale prices turned, talk of last year's buyers selling at a loss followed. Nguyễn Anh Quê, chairman of G6 Group, a Hanoi brokerage and developer, told local media that investors who bought Hanoi apartments after the second quarter of 2025 entered near the top of the cycle and would almost certainly have to accept a loss to sell now. He did not cite an actual loss-making apartment sale. JLL Vietnam's country head, speaking in April before the second-quarter data came out, was less gloomy: there will be individual distressed sales, but no wave of panic selling. What is certain is that resale apartment prices have started to fall. Where prices and volumes go from here, CBRE says, depends on interest rates and on when buyer confidence returns.

Ho Chi Minh City looks different. CBRE's apartment figures now include the former Bình Dương and Bà Rịa-Vũng Tàu provinces that were merged into the city. On that basis, new apartment prices rose 8% from the previous quarter and absorption of new launches was better than in Hanoi. The segment that cooled first was landed housing, meaning townhouses and villas. Measured on the old city boundary, only about 40% of launched units had sold by the end of the quarter. July was worse. Research firm DKRA reported that only 16% of apartments launched that month in Ho Chi Minh City and neighboring provinces sold, and townhouses and villas managed just 2%. In DKRA's separate tally of resort property, not a single resort townhouse or shophouse changed hands. Developers began holding back launches.

Two things explain the drop in sales: too many new projects, and mortgage rates that doubled within a year. Bank lending, as it turns out, has not actually tightened.

CBRE expects Hanoi's new apartment supply for 2026 to exceed the 2019 peak, and the first half alone was the largest since 2020. The pattern holds nationwide: the number of housing units approved for construction in the second quarter was nearly double the first quarter's. Fewer people are buying while more homes queue up to launch.

Interest rates are the more direct cause. Mortgage rates in the first half of 2026 mostly ran between 12% and 14%. Nguyễn Quốc Anh, deputy general director of the property platform Batdongsan, said rates were only 6.5% to 7% a year earlier, so the cost of a mortgage roughly doubled, and 70% to 80% of transactions in the market rely on loans. Savills' research team in Ho Chi Minh City attributes the jump to deposit rates rising first. Since late August, several banks have rolled out new packages that trim introductory rates by about one percentage point. According to a September survey by the Vietnam Association of Realtors, introductory rates now run from 8.2% to 10.5%, but they last only six months to two years. After that, floating rates still sit mostly between 13% and 15%, the same level the ministry recorded for post-promotion rates in the second quarter. The teaser rates came down; the floating rates did not.

Buyers can't carry rates like that. A second-quarter Batdongsan survey found that once mortgage rates pass 9%, most respondents reconsider whether to buy at all. As early as April, CBRE observed that buyers in Ho Chi Minh City were keeping loan-to-value ratios below 40%.

In January, the State Bank of Vietnam told lenders that real estate loan growth for 2026 must not exceed each bank's overall loan growth. Money kept flowing anyway. By the end of June, outstanding real estate credit was up 8.3% from the end of 2025, faster than total credit growth (the rule is measured over the full year), and accounted for about a quarter of all lending. Over the same period, bad debts in real estate rose 10.5%, faster than lending itself. Banks have not stopped lending. The loans just cost more.

So why don't developers cut prices? JLL's April answer was that price cuts would damage market confidence, so developers won't go there lightly. What they are doing instead is issuing bonds, at rates that are not cheap: Hanoi Stock Exchange data show property companies issued bonds in August at an average coupon of about 12.2%. Novaland is selling assets to repay debt and has completed about 70% of its planned disposals by value.

Promotions are multiplying too. Some developers have cut the contract-signing payment to 10% of the price and are covering interest both before and after handover. Nguyễn Quốc Cường, general director of C-Holdings, announced on his personal Facebook page in early September that buyers of a new resort apartment project in Vũng Tàu would be entered into a raffle for a Lamborghini Temerario. The broad expectation in the industry is that list prices for new launches will hold flat rather than fall, with developers preferring discounts, installment plans and interest subsidies to win sales.

Buyers, meanwhile, are waiting. A reader letter published in a local outlet in early September came from a man who wrote that he and his wife spent 15 years saving half the price of a home and borrowed the rest from multiple sources. After moving in, they had no money left, not even for furniture, and he regretted the purchase almost immediately. A reader poll under the letter is currently split evenly between "buy anyway" and "keep the cash."

Đinh Minh Tuấn, southern regional director of the property platform PropertyGuru Vietnam, said this is the first time in years that asking prices have fallen across most property types at once, but he calls it a correction rather than a broad downturn. The Ministry of Construction takes a similar line: prices are showing signs of adjustment after a long climb, and projects in good locations with complete legal paperwork are still selling better than average. The report says the land market has moved from overheating into a correction phase, and that the developers under the most pressure are the highly leveraged ones and those with projects running long.

So far, it is sales volumes that have shrunk and resale apartment prices that have fallen. List prices on new launches have yet to come down.

This article summarizes current market conditions and does not constitute investment advice.

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