Real Estate Stocks Weaken in Early 2026 as Rising Interest Rates Bite

Overview

Most Vietnamese real estate stocks have weakened in the first half of 2026 as rising interest rates weigh on the sector. Only 3 out of 20 tracked stocks posted gains year-to-date through May 11, 2026: HHS (+0.024%), NVL (+25.8%), and VHM (+29.8%). The rest declined, with SCR (-24.7%), KDH (-24.6%), and CKG (-20.1%) among the hardest hit. VIS Rating warns that tighter credit controls and higher borrowing costs will pressure both homebuyer demand and developer financing.

Key Facts

• Only 3 of 20 tracked real estate stocks posted positive returns year-to-date through May 11, 2026: HHS (+0.024%), NVL (+25.8%), and VHM (+29.8%).
• Decliners include SCR (-24.7%), KDH (-24.6%), CKG (-20.1%), HDC (-18.3%), CEO (-18%), DIG (-13.7%), NTL (-13.4%), and PDR (-13%).
• In contrast, 15 of the same 20 stocks gained in full-year 2025 when interest rates were lower.
• VIS Rating reports new supply in Hanoi and HCMC rose about 22% in 2025, but apartment absorption fell to 95% in 2025 from 106% in 2024.
• Mortgage rates are forecast to rise 3-4% year-on-year in 2026, according to VIS Rating.
• VIS Rating expects tighter credit controls from the State Bank of Vietnam, pushing developers to rely more on bonds, equity, and M&A for funding.

What Happened

A market analysis published in mid-May 2026 shows that most real estate stocks on the Ho Chi Minh Stock Exchange (HOSE) and other exchanges have declined in early 2026, reversing the broad gains seen in 2025. The VN-Index hit a record high of 1,927 points in early May, driven largely by Vingroup-related stocks, but the majority of property counters have underperformed.

According to a recent assessment by VIS Rating, the outlook for the residential real estate sector in 2026 faces more challenges than during the earlier recovery phase. While the market has passed the worst of legal and liquidity issues, rising interest rates are pressuring homebuyer demand and corporate fundraising. VIS Rating notes that new supply in Hanoi and HCMC increased about 22% in 2025, but absorption rates have declined, indicating buyer caution amid high home prices and rising borrowing costs.

Market Context

Real estate stocks have been a key driver of the VN-Index’s rally, but the sector is now showing divergence. NVL (HOSE) and VHM (HOSE) have bucked the trend with gains of 25.8% and 29.8% respectively year-to-date, while most peers have fallen. KDH (HOSE) closed at VND 27 on April 15, 2026, down 24.6% year-to-date, reflecting the broader weakness. The sector’s sensitivity to interest rates and credit conditions is evident, as the current environment contrasts sharply with the low-rate period of 2025 that fueled a strong recovery.

Strategic Significance

The rising interest rate environment is testing the resilience of Vietnam’s real estate sector. Developers with strong project execution and balance sheets, such as VHM and NVL, may continue to outperform, while weaker players face margin compression and refinancing risks. VIS Rating’s warning of tighter credit controls suggests that the sector will become increasingly bifurcated, with access to capital becoming a key differentiator. The reliance on bond markets and equity raises could lead to dilution for some companies, while M&A activity may accelerate as distressed assets become available.

What to Watch

• Q2 2026 earnings reports from major developers (NVL, VHM, KDH) for signs of margin pressure and sales volume trends.
• State Bank of Vietnam policy announcements on credit growth limits and interest rate direction.
• Absorption rates for new launches in Hanoi and HCMC in the second half of 2026.
• Corporate bond issuance volumes and yields for real estate firms, indicating market access and cost of capital.
• M&A transactions involving distressed property assets, which could signal consolidation.