•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Pressure on capital costs is rising amid tight credit conditions, forcing hundreds of real estate firms to exit the market and shifting capital toward more efficient segments. In Q1 2026, the General Statistics Office reported that 726 real estate companies completed dissolution procedures, double the figure from the same period a year earlier. The trend points to both near-term stress and a broader adjustment as funding costs, financial structure, and access to credit tighten simultaneously.
After the State Bank of Vietnam’s policy meeting in early April, the lending environment showed signs of cooling as many commercial banks cut rates. However, surveys indicate the reductions have not yet translated into meaningful relief for businesses or home buyers.
Current loan rates commonly range from 6.99% to 10.5% per year during the initial 6–24 month promotional period. After that period, rates are typically calculated as the reference rate plus a margin of 3–4%, bringing effective borrowing costs to around 10.5–12.5% per year. With profit margins shrinking and cash flows weakening, the cost of capital has become a significant burden.
Beyond interest rates, firms report that credit access remains difficult. Even when a project is considered feasible, obtaining credit lines and disbursing funds on schedule can be challenging. This delays implementation, increases costs over time, and intensifies financial strain.
Mr. Nguyen Quoc Hiep, chairman of the Vietnam Association of Construction Contractors, said the Vietnamese real estate market depends heavily on bank lending, which accounts for around 70% of total funding. In the current environment, this channel is narrowing considerably. He noted that many banks, including the Big Four, are refusing to fund new projects or are funding only projects in major cities such as Hanoi and Ho Chi Minh City.
When cash flow is blocked and financing costs rise quickly, firms shift from growth to defense—prioritizing survival over expansion, Mr. Hiep said.
The tightening also affects home buyers, who rely heavily on leverage. With loan-to-value ratios of up to 70% of asset value and maturities of 10–20 years, a rise in rates from 6–7% to 13–14% per year could sharply increase debt service costs.
Credit constraints are further reinforced by banks’ prudent asset valuation. Even when assets appreciate in line with the market, revaluing assets to raise loan limits remains difficult, particularly for companies with weaker credit histories.
Together, these factors create a financial clamp that tightens both supply and demand, contributing to a prolonged lull in the real estate market.
While high interest rates create short-term pressure, experts argue they also contribute to restructuring. Dr. Chau Dinh Linh said the impact of rate increases depends on each firm’s financing structure and operating capacity. The pressure is most concerning for firms that rely too heavily on leverage, do not optimize cash flow, or have thin margins.
Conversely, for firms in growth cycles with solid fundamentals and the ability to convert capital efficiently, higher rates may function as a temporary adjustment rather than a decisive setback.
Dr. Linh described interest rates as a tool that can classify and rearrange firms: those dependent on cheap money face greater difficulty, while firms with strong financial foundations, good governance, and efficient capital conversion can continue to exist and expand.
The restructuring also implies a reallocation of capital in the economy. Resources are shifting away from asset and speculation-oriented activities toward production and real-economy sectors that generate more sustainable value.
However, experts emphasized that efficient restructuring requires more than interest rates and credit conditions. Overreliance on bank lending leaves real estate exposed to cycles of tightening and loosening. Dr. Dinh The Hien argued that developers should move from short-term financing to medium- and long-term funding, using long-term, transparent, and more stable sources. He said separating short-term bank capital from long-term investment needs is key to escaping the cycle of rescue and developing based on real value.
In addition, diversifying funding channels is expected to be essential. The stock market, corporate bonds, and investment funds are expected to play a larger role in providing long-term capital for real estate.
On policy, many experts suggested a more flexible approach to credit management rather than rigid mechanisms. Directing capital toward segments with real demand—such as housing, industrial real estate, and logistics—could help the market develop more balanced. At the same time, fiscal and land policies should be aligned to increase supply and reduce price pressures. When supply and demand are balanced, capital can flow to productive areas with less reliance on administrative intervention.
In an economy targeting higher growth, real estate is not only an investment channel but also a driver that affects sectors such as construction, materials, and interiors. Redirecting capital toward the right areas therefore has implications beyond the real estate market itself.
Premium gym chains are entering a “golden era” that is ending or already in decline, as rising operating costs collide with shifting consumer preferences toward more flexible, community-based ways to exercise. Long-term memberships are shrinking, margins are pressured by higher rents and facility expenses, and competition from smaller, more personalized…
