Dr. Can Van Luc: Are Real Estate Firms Stretching Themselves Too Thin With 10–15 Concurrent Projects?

During the roundtable discussion at the Vietnam Real Estate Market Forum (VREF 2026), Dr. Can Van Luc, Chief Economist at BIDV, delivered candid warnings regarding cash flow, interest rates, and credit risks in the real estate market for 2026.

According to Dr. Luc, the most significant positive development in 2025 was the notable recovery of the construction and real estate sectors. Citing data from the General Statistics Office, he noted that the construction industry grew by 9.62%, surpassing the national average GDP growth rate of 8.02%. Meanwhile, the real estate business sector expanded by 4.63%, the highest in six years, contributing approximately 3.5% to GDP.

“These figures demonstrate that the real estate and construction markets have rebounded quite positively,” Dr. Luc emphasized. Additionally, 2025 saw the establishment of around 2,700 new real estate companies, a 27% increase compared to the previous year—a rare occurrence in recent years.

Addressing the outlook for real estate capital flows, Dr. Luc opined that capital continued to flow robustly into the market in 2025. Specifically, real estate credit grew by approximately 22%, outpacing the average credit growth of the entire banking system (18.5%). Within this, loans for real estate investment and business rose by about 24%, while loans for home purchases and renovations increased by 14–15%.

Beyond bank credit, other capital channels also recorded positive results. FDI in real estate reached roughly $6.3 billion, accounting for nearly 20% of total registered FDI in Vietnam, with disbursements nearing $2 billion. Corporate bonds issued by real estate firms totaled about VND 123.5 trillion, a 40% increase from 2024.

“Therefore, I believe that capital for the real estate market was not lacking last year. The issue lies in the regulation and allocation of capital,” Dr. Luc stated.

Dr. Luc highlighted a new interest rate landscape that businesses must heed. In 2025, while credit surged, capital mobilization only grew by about 14.5%, forcing banks to raise both input and output interest rates.

“Real estate is not a priority sector for the banking system, except for social housing and industrial zones. Real estate businesses will have to accept higher lending rates, a general trend in line with regulatory directives,” Dr. Luc explained.

Furthermore, Dr. Luc noted that real estate credit currently constitutes about 24% of the total outstanding debt in the economy—a relatively high level. Loans for real estate investment and business are growing faster than overall system credit.

Given these realities, Dr. Luc issued a direct warning to businesses: “Many real estate companies are currently over-extending themselves, with some undertaking 10–15 projects simultaneously. I ask, where is the funding coming from?”

He cautioned that while risks may not surface immediately in a favorable market, “if the market encounters issues, businesses will undoubtedly face problems,” especially with higher interest rates, tighter credit controls, and less accessible capital.

Dr. Luc also advised businesses to restructure their product portfolios, carefully considering the high-end segment while focusing on the mid-range, social housing, and affordable housing segments, which remain in short supply. Regarding property prices, he stressed the need for businesses to collaborate with the government and homebuyers to regulate prices in a reasonable and healthy manner.

“The government has three key tools to regulate the real estate market: supply, fiscal policy (taxes and fees), and monetary policy (credit and interest rates). The challenge is finding a balance—controlling risks without overly tightening the market and causing a downturn,” Dr. Luc concluded.