According to the Vietnam Association of Realtors Institute for Real Estate Research (VARS IRE), around VND1.56 quadrillion was injected into the economy in the first seven months of 2025, up 10 percent compared to the end of 2024. Financial reports from several banks show that credit growth in real estate significantly outpaced the overall credit growth of the entire system.

The main reason was the low capital absorption capacity of manufacturing businesses due to high input costs and weak purchasing power. Many real estate projects, recently cleared of legal hurdles, require capital for implementation.

Some businesses borrow bank funds but misuse them, with capital being funneled into the real estate market.

“The plentiful money supply in the market, along with unprecedented long-term financial incentives such as 'zero interest, deferred principal' policies from developers, has been a key driver pushing real estate prices up, setting a new price level,” VARS IRE said.

The institute noted that flexible payment scheme, requiring only 10-30 percent of the product value upfront, with both principal and interest deferred for 12 months to five years, can support real homebuyers, but also create opportunities for investors to manipulate the market. They can use minimal capital to gain disproportionately high returns relative to the risks taken.

In practice, many individual or group investors have used these policies to purchase multiple properties simultaneously, join various projects, and make significant profits with little initial capital.

For example, with an apartment worth VND3 billion, an investor only needs to pay VND600-900 million upfront. If the price increases by 15-20 percent within 1-2 years during the interest-free and grace period, the gain of VND450-600 million becomes net profit.

“In this case, the return on capital can reach 50-70 percent, an exceptional profit margin that few investment channels can bring. Over the past year, with real estate prices heating up, some investors have doubled their capital during the grace period before the property is even handed over,” VARS IRE said.

Additionally, some investors chose not to use these incentives but instead paid up to 95 percent of the contract value (the maximum allowed for future housing projects) to receive big discounts. They then resell at a higher price compared to those who purchase through loan schemes.

The allure of high profits has driven a strong flow of capital into real estate. VARS IRE pointed out that expectations of continued price increases have led many individuals and investors to leverage these incentives to enter the market and hoard properties while waiting for prices to rise.

Hong Khanh