Real Estate

Real Estate 2026 Amid Rising Interest Rates: How Does It Differ from the 2022 Freeze?

As the year-end interest rates creep upward, the real estate market in 2026 faces a pivotal moment. Will history repeat itself, echoing the tense scenarios of four years prior, where investors were forced into distress sales and cut their losses? The question looms large, leaving stakeholders to ponder the potential trajectory of the market in the coming months.

Administrator

11 December, 2025

How Do Rising Interest Rates Impact Real Estate?

Speaking at the Vietnam Real Estate Conference 2025 (VRES 2025) on December 9th, Mr. Nguyễn Quốc Anh, Deputy General Director of Batdongsan.com.vn, shared that in the final quarter of this year, interest rates began to rise as many commercial banks recorded a decline in deposits, pushing the 12-month deposit interest rate to 5.3-5.5% per annum.

According to Mr. Quốc Anh, to accurately assess the impact of the year-end interest rate hike, it’s essential to compare it with the situation in 2022. That year, the market faced a “double shock” as global inflation soared, exchange rates fluctuated sharply, and Vietnam was forced to raise interest rates in line with the Fed. Lending rates then surged to 11-15% amid a corporate bond crisis that abruptly tightened credit.

“The market nearly froze, and transactions plummeted. High borrowing costs forced many investors to sell at a loss, particularly in land plots,” he noted.

From the second quarter of 2022, prices entered a deep correction cycle. Market sentiment hit rock bottom, with 72% of surveyed consumers worried about inflation and 75% expecting interest rates to continue rising.

In contrast, 2025 presents a vastly different scenario. The current slight increase in deposit rates is purely technical, aimed at restoring capital levels after the sharp declines of 2024. Lending rates hover around 6-7% per annum, higher than the 5-5.5% lows of youth-targeted packages but still within a supportive range for transactions.

“Current market pressure stems mainly from capital demand for public investment and production, while low deposit rates continue to shift funds into real estate and stocks,” he analyzed.

2026 will mark a period of clearer market segmentation and greater stability. Photo: Hoàng Hà

He believes that banks’ slight increase in deposit rates at year-end is positive, as it helps the system better balance long-term capital, laying a stable foundation for the next cycle.

From a market perspective, he emphasized the stark differences between the two interest rate hike periods.

In 2022, the real estate market was overheated, with speculative products dominating. A significant portion of transactions relied on financial leverage, making the market fragile. When interest rates rose abruptly, many investors could no longer afford repayments, leading to a sharp drop in liquidity and a near freeze in land plot transactions.

In 2025, however, the market is much “calmer,” shifting toward products tied to actual housing needs. While transaction interest hasn’t returned to 2022 peaks, funds are now focused on legally transparent products, reflecting a cautious mindset after the 2022 shock and a more sustainable market trend.

Additionally, legal frameworks from the amended Land Law and Real Estate Business Law enhance transparency and improve project implementation processes. Land prices in 2025 remain lower than 2022 peaks in many areas, helping maintain market stability and reduce risks.

He noted that there’s no widespread land fever yet; hotspots are primarily linked to administrative boundary mergers, while transactions remain concentrated in apartments and private homes in major cities.

“In the short term, the market may still be exploratory, but in the medium to long term, the recovery cycle began in 2024 and has ample room to grow. I believe 2026 will see clearer market segmentation and greater stability. A repeat of the 2022 crisis is highly unlikely,” Mr. Quốc Anh concluded.

Which Segments Will Lead the Market?

Discussing real estate segments, Mr. Đinh Minh Tuấn, Sales Director at Batdongsan.com.vn, predicted that apartments and private homes will remain the most promising segments in the first half of 2026. Apartments are expected to grow by 42%, while private homes and townhouses will see around 31% growth.

Dr. Cấn Văn Lực speaks at the Vietnam Real Estate Conference 2025 (VRES 2025). Photo: Nguyễn Lê

According to Mr. Tuấn, apartment prices will rise slightly in 2026 due to high-end supply driving up averages, increased real demand, rising land and construction costs, insufficient supply, and a shift from private homes to apartments.

Meanwhile, Dr. Cấn Văn Lực, Chief Economist at BIDV and a member of the Prime Minister’s Policy Advisory Council, stressed the need for continued policy refinement in the real estate market, particularly addressing land valuation issues in the Land Law.

Dr. Lực noted that the State Bank and Government aim to stabilize interest rates to support economic growth. However, real estate-related rates are creeping up with deposit rates. Commercial housing isn’t a priority sector, so lending rates have risen, requiring businesses to carefully manage their finances.

He added that upcoming measures may further regulate the real estate market for safety and efficiency.

The Government will also diversify capital sources, including a national housing fund for social housing rentals. Plans include establishing a Real Estate and Land Use Rights Trading Center to ensure transparency and build a unified national database.

Nguyễn Lê

– 19:29 09/12/2025