Real estate supply in the first half of the year increased by about 40%, but most of it has high prices or is located far from the center, while loan interest rates increased, making it still difficult for many people to buy a house.
Mr. Minh and his wife, 35 years old, in Ho Chi Minh City, have about 1 billion VND accumulated, planning to borrow an additional 2 billion VND to buy an apartment of about 3 billion VND. Seeing many projects open for sale, he hopes to have more affordable options.
However, after a few months of searching, apartments near his workplace mostly cost 4-6 billion VND. Projects costing 3-3.5 billion VND are mostly located further away, increasing travel time, while families still have to borrow 2-2.5 billion VND for 15 years, with a preferential interest rate of 10% for the first year, then floating.
"With this loan, monthly principal and interest payments are about 27 million VND, accounting for the majority of the couple's income. When the preferential period ends, the pressure to repay the debt is even greater," he said. In the end, he and his wife decided to continue renting the house.
Not only Mr. Minh, many other cases also thought they would be able to buy a house soon when the supply increased sharply, but the results were not as expected.
A report by Dat Xanh Services (DXS-FERI) noted that in the first six months of the year, the country had about 37,300 new housing products launched for sale, an increase of 16% over the same period. Total primary supply exceeded 102,400 products, an increase of about 40%, but consumption decreased by 12%, to 26,100 products. The average absorption rate is only 20-30%.
Explaining the paradox of increased supply and people still finding it difficult to buy a house, experts say there are many reasons.
First of all, new supply is mainly distributed in areas outside the center, not meeting buyer needs. CBRE Vietnam recorded that in the second quarter, Ho Chi Minh City after the merger had 6,573 new apartments for sale, an increase of 20%, of which nearly 80% came from the old Binh Duong.
The next barrier is price. Economic expert Tran Nguyen Dan acknowledged that increased sales volume does not mean improved housing access. According to him, the biggest obstacle is still high primary prices when most input costs have increased. Labor costs are about 30-50% higher than two years ago, material prices have increased, while business loan interest rates can increase from about 10% previously to 14-15% a year.
A project usually takes 4-5 years from land purchase, legal completion to bringing the product to market. Capital costs accumulated during this time, plus marketing, brokerage and sales support policies, are finally included in the price.
"All of these increased costs push up the price of primary apartments on the market," Mr. Thang said.
Accordingly, even though the supply moved away from the center, the whole market price level still increased. The average primary price reached about 76 million VND per m2, up 16% over the same period; secondary is about 62 million VND, an increase of 26%.
In the old Ho Chi Minh City area, affordable options are even more limited. According to Savills Ho Chi Minh City, in the first half of the year, the market had about 3,700 new apartments from 7 projects. All open sales are priced at over 90 million VND per m2, of which 80% exceed 120 million VND.
Economic expert Tran Nguyen Dan said apartments under 50 million VND per square meter are almost absent. Many projects are moving away from the center but prices have not decreased commensurate with the location, connection infrastructure and public utilities in some areas have not kept up.
In addition, loan interest is also a big obstacle for buyers. Savills recorded an average home loan interest rate of about 13%, an increase of 4 percentage points compared to the same period in 2025. High house prices and increased capital costs make buyers cautious, pulling the absorption rate down to about 32%.
Mr. Vo Hong Thang, Investment Director of DKRA Group, analyzed that in the same period last year, buyers could borrow at an interest rate of about 6.5-6.8% per year, fixed for two years. Currently the loan amount is similar but the interest rate is about 10.5-11%, only fixed for the first year, then the floating interest rate can increase to 13-14% a year.
"Suppose you previously borrowed 1 billion VND, but now with high interest rates, the cost pressure can be equivalent to a loan of 2 billion VND. This is a big barrier for home buyers," he said.
Economic expert Tran Nguyen Dan also pointed out that the impact of interest rates is clearer when compared with income. With a house priced at 3 billion VND, if you borrow 70%, equivalent to 2.1 billion VND in 20 years, at an interest rate of 9% per year, the payment is about 19 million VND per month. When the interest rate increases to 13% a year, the amount can be nearly 25 million VND. If the total debt repayment obligation does not exceed 40% of income, the household needs a stable income of over 60 million VND per month, this level is not common with salaried workers in large cities.
Even if house prices adjust a few percent, he believes that affordability will not improve significantly because the absolute value of the house is still high. A 3 billion VND apartment reduces by 5%, equivalent to 150 million VND, while the buyer still has to prepare hundreds of millions to a billion VND of equity capital and shoulder a large loan for many years.
According to Mr. Dan, interest rate pressure may also spread to the secondary market. Many home loans are only preferential for 6-18 months before switching to floating. Borrowers in the 2024-2025 period are gradually ending their preferential period. As monthly payments increase, a portion of homeowners may have to resell properties, increasing secondary supply.
Liquidity is also affected when investors account for a large proportion of the primary market. According to data recorded by DKRA, about 70-75% of buyers belong to the investment group, of which about 80% use financial leverage. When interest rates go up to 10-14%, this group is more cautious before putting down money.
Mr. Dan forecasts that in the next 6-12 months, new supply will continue to come to the market according to investors' plans. If the product structure, house prices and borrowing costs have not changed, inventory may increase but people's access to housing has not improved.
"The market will only recover sustainably when supply is more consistent with the income and borrowing ability of people with real housing needs," Mr. Dan said.
