Vietnam Real Estate Under Price Pressure as Supply and Mortgage Rates Rise

Overview

Q1/2026 earnings for Vietnam’s listed real estate and banking sectors showed robust growth, with real estate NPATMI rising 32.3% YoY, led by VIC, VHM, VRE, and NVL. However, a 65% YoY surge in primary supply to nearly 78,000 units and the impending reset of mortgage rates from fixed 6-7% to floating 12-14% are creating downward pressure on secondary market prices, posing a risk to sector valuations.

Key Facts

• Real estate sector NPATMI grew 32.3% YoY in Q1/2026 across all three exchanges.
• Primary supply surged approximately 65% YoY to nearly 78,000 units in Q1/2026 (DXS Research).
• Mortgage rates are transitioning from fixed 6-7% (2024) to floating 12-14%, pressuring secondary market prices.
• VIC, VHM, VRE, and NVL drove sector growth, while NLG and DXG saw significant profit declines.
• Banking and real estate contributed 56.2% of total market absolute profit growth in Q1/2026.
• Industrial park enterprises reported sharp profit declines due to slower MOU signing, but recovery signs are emerging.
• Inventory in major cities is concentrated in high-end and luxury segments, misaligned with mid-range demand.

What Happened

According to SSI’s Q1/2026 earnings review, total revenue across all three exchanges grew 21.2% YoY, while net profit attributable to parent company (NPATMI) rose 35.2% YoY. Excluding Vingroup-related stocks, HOSE NPATMI growth was 31.8%, versus 28.5% in 2025. The real estate sector posted NPATMI growth of 32.3% YoY, driven by major developers VIC, VHM, VRE, and NVL, partially offset by a decline at VEF.

However, the supply side is intensifying: primary supply in Q1/2026 reached nearly 78,000 units, up 65% YoY, while absorption rates slowed. Inventory remains skewed toward high-end and luxury segments, while mid-range demand is unmet. Additionally, mortgage rates are set to rise as fixed-rate loans from 2024 (6-7%) reset to floating rates of 12-14%, potentially forcing distressed sales in the secondary market.

Market Context

As of April 15, 2026, VIC closed at VND 177 (+6.95%), VHM at VND 138 (+6.83%), VRE at VND 28 (+1.79%), and NVL at VND 18 (+2.63%), all on HOSE. The strong Q1 earnings have supported recent price gains, but the supply overhang and rising mortgage costs could cap further upside. The real estate sector’s growth is increasingly polarized, with large caps outperforming while mid-caps like NLG and DXG struggle.

Strategic Significance

The combination of rising supply and higher mortgage rates threatens to compress margins for developers, particularly those with high exposure to secondary market transactions. While large-cap developers like VIC and VHM benefit from diversified business models and strong presale collections, the broader sector faces a potential price correction. The misalignment between supply (high-end) and demand (mid-range) suggests that developers may need to adjust product mix or pricing strategies. For long-term investors, the key risk is whether the sector can sustain earnings growth if secondary prices decline and absorption slows further.

What to Watch

• Q2/2026 earnings reports from VIC, VHM, VRE, and NVL for signs of margin compression or revenue recognition delays.
• Monthly primary supply and absorption data from DXS Research to gauge inventory trends.
• SBV policy on mortgage lending rates and any potential intervention to ease the rate reset impact.
• Foreign ownership filings for VIC and VHM, as foreign investor sentiment may shift with price pressures.
• Progress on new project launches in mid-range segments to address demand-supply mismatch.