Le Hoang Chau, chairman of the HCM City Real Estate Association, said prices had fallen by an average of 40-60 per cent, although losses of up to 70 per cent were not uncommon from the peaks at the beginning of this year.

He said the market remained frozen, with hardly any deals taking place. Even potential buyers said they were hoping for prices to fall further, he added.

Liquidate

Do Thi Loan, general secretary of the association, said many people were being forced to liquidate their properties to repay bank loans.

But apartment prices were unlikely to fall any further, she said.

The State Bank of Viet Nam Governor, Nguyen Van Giau, announced this month that banks could lend for real-estate development and many domestic and foreign banks had resumed lending to actual house buyers.

But they imposed stringent conditions and the loans were still extremely hard to obtain.

The Personal Income Tax Law, set to take effect next January, is also hurting the market. It requires property sellers to pay a tax of 25 per cent of the profit or 2 per cent of the sales price.

Nguyen Manh Ha, head of the Ministry of Cons-truction’s Housing Management Department, said there was still big demand for moderately priced houses. As a result, strong price declines had occurred, mainly in the new apartment and high-end housing segments. The prices of cheap and medium-priced property have remained unchanged or fallen just a little.

Ha also recommended that developers follow market trends and focus on building smaller apartments.