Businesses slow down due to blocked capital flow
As interest rates trend upwards and credit limits are controlled under the regulatory measures of the State Bank of Viet Nam, many real estate enterprises are facing difficult cash flow challenges. Numerous projects have had to delay progress or even halt altogether due to the inability to access loans. Le Hoang Chau, Chairman of the Ho Chi Minh City Real Estate Association, commented that the restriction of real estate credit growth to not exceed the overall level of the economy has caused difficulties for many businesses. Signed contracts are not being disbursed on schedule, while ongoing loans are also being disrupted.
Market purchasing power has also been affected. Director of Le Thanh Company Le Huu Nghia cited an example: the company’s 2,000 billion VND social housing project has completed its foundation stage but is at risk of stagnation due to the inability to secure loans. Although there is a preferential credit package of 145,000 billion VND with a loan term of up to 20 years and an interest rate of 6.1% per year, businesses find it extremely difficult to access. Notably, when the company requested to borrow at commercial housing interest rates, the bank also refused, citing concerns over accountability for lending to the wrong target group.
In addition to the social housing segment, industrial real estate enterprises are also under considerable pressure. Tran Viet Anh, General Director of SCC Investment Joint Stock Company (SCCI), stated: Developing a 400-hectare industrial park requires substantial capital and a long payback period. However, credit is currently being “grouped together” with other types of real estate, without an appropriate separate mechanism. When major fluctuations occur, supply chains are disrupted, customers delay contract signings, and businesses face even greater difficulties. Excessive credit tightening will become a “bottleneck”, while loosening control poses risks; therefore, capital flow must be properly directed.
Fluctuations in interest rates are directly affecting both businesses and homebuyers. Most people need to borrow as much as 70% of the property value, so when interest rates increase from preferential levels (6–7%) to 13–14%, the financial burden becomes very heavy. As a result, housing demand declines and market transactions slow down. Businesses not only face rising financial costs but also deal with construction material prices increasing by 10–30%, eroding investment efficiency.
Nguyen Thi Thanh Huong, General Director of Eras Land Real Estate Investment Joint Stock Company.
From a market perspective, Nguyen Thi Thanh Huong, General Director of Eras Land Real Estate Investment Joint Stock Company, noted that interest rate fluctuations are directly impacting both businesses and homebuyers. Most individuals must borrow up to 70% of the property value, so when rates rise from preferential levels (6–7%) to 13–14%, financial pressure becomes extremely significant. Consequently, housing demand decreases and transactions stagnate. Businesses must bear increased financial costs while also facing construction material price hikes of 10–30%, which erode investment efficiency.
Real estate is not merely a standalone economic sector but also serves as both an “input and output” for more than 40 other sectors such as construction, materials, interior design, transport, finance, and tourism. Therefore, any fluctuation in this market generates widespread ripple effects across the economy.
According to Chu Van Hai, Deputy Director General and Deputy Chief of the Standing Office of the Central Steering Committee for Housing Policy and Real Estate Market (Ministry of Construction), real estate accounts for approximately 12% of GDP and acts as an “economic regulator”. In reality, early 2026 has shown that construction activities have slowed due to a lack of supply from real estate projects. Businesses in building materials, steel, and cement have been affected in a chain reaction as demand declines.
Tran Si Nam, Deputy Director of the Ho Chi Minh City Department of Construction, stated that although the market shows signs of recovery, with revenue in 2025 reaching approximately 270,000 billion VND and nearly 104,000 billion VND in the first quarter of 2026, high interest rates remain a major barrier. He emphasised that real estate in Ho Chi Minh City has at times contributed up to 30–34% of GRDP.
Harmonising policies to unlock capital flows
In light of current difficulties, the business community and many experts share a common view: a flexible credit policy is needed, with clear classification tailored to the characteristics of each segment. Le Hoang Chau proposed that the State Bank of Viet Nam should allocate annual credit limits to banks instead of quarterly allocations as at present, and consider loosening credit growth caps in necessary periods to support economic growth.
Meanwhile, Tran Viet Anh suggested that industrial real estate and logistics should be separated into a priority group linked to production drivers. Classifying credit based on usage purposes would help to direct capital appropriately and limit risks, while still promoting production. Businesses also hope that regulators will allow more flexibility in interest rates for social housing, avoiding the situation of “having a credit package but being unable to borrow”. Interest rates need to be aligned with the medium- and long-term nature of real estate.
Businesses need to reduce their dependence on bank credit by developing capital markets, especially corporate bonds and new fundraising channels. This will be a long-term solution to create sustainable capital sources for the market.
Assoc Prof, Dr Nguyen Huu Huan, Vice Chairman of the Executive Board of the Ho Chi Minh City International Financial Centre.
From another perspective, Assoc Prof, Dr Nguyen Huu Huan, Vice Chairman of the Executive Board of the Ho Chi Minh City International Financial Centre, stated that businesses need to reduce reliance on bank credit by developing capital markets, particularly corporate bonds and new fundraising channels. This will serve as a long-term solution to establish sustainable capital sources for the market.
Sharing this view, economic expert Dr Huynh Thanh Dien emphasised that regulation must be synchronised across monetary, credit, and fiscal policies. Fiscal policy in particular can play a role in controlling speculation and stabilising the market, thereby reducing pressure on monetary policy.
