Property market fails to return to 2006-07 boom,

The financial market's role in the market is becoming increasingly important. With credit policies now limiting lending to the property sector, developers and investors have found it more difficult to obtain bank loans to invest in property sectors.

In addition, there is an oversupply of apartment buildings in HCM City, with the situation expected to last until 2015.

With lower prices, property markets in neigh-bouring provinces like Binh Duong and Dong Nai are competing with HCM City to attract investors.

Rents unattractive

In addition, investors are no longer viewing rental apartments as a good value as rental charges now account for only 0.3-0.5 per cent of apartment value, which is lower than current deposit interest rates.

With low demand and abundant supply, apartment prices in HCM City are expected to fall this year. Housing, however, has increased in prices quoted in Vietnamese dong, according to property companies in HCM City.

The price of houses, quoted in Vietnamese dong, has increased by 12-15 per cent compared to late last year, according to Pham Van Hai, general director of ACB Real Estate Company under the Asia Commercial Joint Stock Bank.

House prices quoted in gold fell by 20-30 per cent over last year, but the prices rose considerably when converted into dong.

Only 20 per cent of the market is selling houses priced in gold.