Vietnam real estate stocks 'out of sync'

While Vietnam’s benchmark VN-Index has continuously conquered new highs since the beginning of 2026, the real estate stock group has shown contrasting movements.

The rise of the VN-Index, which represents the Ho Chi Minh Stock Exchange (HoSE), has been supported by improved liquidity and leadership from large-cap sectors such as banking, securities, and several industries benefiting from the economic recovery cycle.

However, contrary to the overall picture, real estate stocks have been far less vibrant, even clearly “out of sync” with the broader market’s upward trend.

Data show that since the beginning of 2026, the real estate stock index has fallen 6.95%, moving in the opposite direction of the VN-Index, which rose 3.46%. In fact, this divergence has persisted for some time if the influence of Vingroup tickers is excluded.

Over the past month, the real estate sector rose 13.4%, slightly lower than the VN-Index’s 14.16% gain. This increase was driven mainly by VIC of conglomerate Vingroup (+13.57%) and VHM of its subsidiary Vinhomes (+36.22%).

In contrast, many property tickers posted sharp declines, such as TCH of Hoang Huy Investment Financial Services JSC (-7.83%), PDR of Phat Dat Real Estate Development Corp. (-5.91%), CRV of CRV Real Estate Group (-7.51%), and VPI of Van Phu Real Estate Development JSC (-7.97%).

Explaining this “out-of-sync” performance, many investors pointed to tighter credit conditions for real estate imposed by the State Bank of Vietnam (SBV). Information from Government and SBV meetings indicates that from 2026 onward, credit to the real estate sector will be more strictly controlled and limited. This has prompted investors to accept cutting losses on property stocks, increasing downward pressure on the sector.

In addition, news about the implementation of real estate identification from March 1, 2026 – a step toward the use of identification codes to manage transactions, taxation, and related activities - has strongly affected market sentiment.

Rising interest rates have also weighed on investor psychology. Nguyen Anh Quan, investment consulting and research expert at broker DNSE, noted that higher borrowing costs and slower sales lead to larger capitalized interest expenses, thereby compressing corporate profit margins during revenue recognition periods.

At the same time, higher deposit interest rates increase capital costs, putting pressure on banks with large real estate loan exposure or medium- and long-term lending. As a result, cash flows in the stock market have become more cautious, with investors reducing leverage as margin borrowing costs rise.

Tran Tuan Minh, CEO of TVI Financial Investment JSC, pointed out that after the application of the new land price framework and the unblocking of many projects, budget revenue from land reached a record VND575 trillion ($21.89 billion) in 2025 (equivalent to 4.5% of GDP), equal to the combined total of the previous three years.

According to Minh, this directly affects three groups: those converting land-use purposes will face very high conversion costs; developers will see diminished profits as project land costs surge; and homebuyers will bear part of this “cost-push” increase in housing prices.

“Therefore, real estate companies will struggle if they lack strong financial capacity or if their projects are not in prime locations,” he stressed.

Some experts believed that regulatory actions will help make the real estate market more sustainable in the medium and long term.

Truong Hien Phuong, senior director at KIS Vietnam Securities, stated that tighter control does not mean no lending. Banks will still provide credit to real estate firms that meet criteria related to collateral, project feasibility, transparency, and cash-flow strength. Restrictions mainly apply to inefficient and non-transparent entities.

“I believe these are necessary steps to bring the real estate market back to balance after a boom year in 2025,” he said.

Similarly, experts at Yuanta Vietnam Securities argued that credit policy in 2026 is not a contractionary adjustment for the real estate market as initially feared. Reducing the multiplier from 3.5% to 2.6% and capping real estate growth rates are technical measures to restore balance.

Yuanta Vietnam estimated that capital flows into real estate this year will remain high, at around VND749 trillion ($28.51 billion), ensuring sufficient liquidity for basic activities.

Careful selection of real estate stocks

Many experts believed real estate stocks have entered oversold territory. Coupled with improving business results, the sharp price declines are seen as opportunities for medium- and long-term investment.

KB Securities Vietnam (KBSV) noted that the average P/B valuation of several real estate companies has fallen below their five-year average P/E levels. The firm also expects positive business growth for property firms in 2026, driven by improved supply thanks to legal bottleneck removal, regulatory framework enhancements for the property market, accelerated infrastructure development and connectivity, and interest rates maintained at levels supportive of economic growth.

Given low valuations, KBSV recommended that investors consider selecting companies with strong prospects, large clean land banks, complete legal status, strong project execution capabilities, and healthy financial structures.

SHS Securities, meanwhile, emphasized market polarization in 2026. It saw the real estate market entering a transition phase, with supply accelerating while demand recovery lags, resulting in higher differentiation and stricter market discipline compared to the 2020-2022 period.

According to SHS, 2026 will be a year governed by selection principles: projects with solid legal foundations, genuine progress, and products aligned with real demand will sell, while others will have to compete through effective policies and affordable prices.

“The criteria for selecting real estate stocks are no longer merely ‘having a large land bank, but rather the ability to commercialize that land at the right time. Companies with new project launches in areas of strong real demand, especially core urban areas or well-developed ring zones, and with projects scheduled for handover next year to secure profits amid rising land and capital costs, will lead business performance in 2026,” the brokerage stated.

However, many investors believed that despite positive prospects and low valuations, the short-term “out-of-sync” performance of real estate stocks relative to the VN-Index may persist.

They held that in the current context, capital flows are prioritizing sectors with clear catalysts such as state-owned enterprises, technology, and state-owned banks. These stocks are attracting strong inflows, potentially drawing capital away from other sectors, including real estate.

Therefore, the real estate sector is expected to see only technical support and short-term rebounds, while awaiting clearer signals from the property market and Q4/2025 earnings results, they said.