However, they agree that access to bank credit will be crucial to the markets’ ability to recover after nearly 10 months of stagnation.

Nguyen Quang Trung, general director of the Saigon Green Real Estate Development Joint Stock Company, said the market could not recover unless the government eases credit.

Since most realty firms depend on bank credit, many of their planned projects and even those underway have been suspended, according to him.

Duong Tuan Tu, general director of the Anh Tuan Housing Limited Company, said to revive the real estate market, banks needed to lend builders to speed up their projects.

At a seminar held last week by the HCM City Real Estate Association and the National Financial Supervisory Commission, Le Duc Thuy, chairman of the latter, said the government had not prohibited banks from lending builders but only recommended caution.

Tran Hoang Ngan of the HCM City University of Economics said when the Government tightened monetary policy to fight inflation, both realty firms and buyers were hit by the high interest rate.

A rate of 12 to 15 percent was acceptable for them, he said, adding that whether borrowers mortgage property to borrow for their personal use or to invest in real estate, banks did not face major risks.

Housing and land-use right prices in HCM City will remain relatively unchanged if the government eases bank credit. Otherwise, the prices will fall below 70 percent of early 2008 prices, according to industry insiders.

Le Hoang Chau, Chairman of the HCM City Real Estate Association, said that in many market segments, housing and land-use right prices had fallen by an average of 40 to 60 percent, and even 70 percent compared to those in the beginning of this year, when they were at their highest.

“If banks do not extend the deadline for customers who have borrowed money to purchase a home to pay off loans, but consider the loans as overdue debt, it is certain that the price will fall far below 70 percent because many people will be forced to sell off to avoid foreclosure by banks,” Chau said.

Pham Van Hai, general director of the ACBR Company, said that a number of local commercial banks, foreign banks and some funds had resumed lending customers who wanted to buy houses.

However, lending conditions were very strict to ensure repayment, he said.

Nguyen Van Giau, the governor of the State Bank, announced at the beginning of this month that banks were allowed to ease credit for real estate projects.

However, according to many experts, the key point to help the market quickly revive is to have policies to boost demand.

HCM City Business Association chairman Huynh Van Minh said that real estate businesses lacked funds to rescue themselves, because banks were not making new loans.

According to statistics from the VietRees market research company, as buyers wait, real estate transactions stagnate, and housing and land prices keep falling.

Dang Hong Anh, Board Chairman of the Sacomreal Company, had a positive outlook for the real estate market in the next few months. He said some banks already had policies to restructure debts and extend deadlines until June 2009 to customers who had bought apartments.

And from now until then, lending interest rates might return to the level of 12 percent a year, when it would be more appropriate to invest in or buy housing and land, Anh said.