Recent declines in property prices are actually a positive sign as it means many people will have better opportunities to afford the home they want, the Ministry of Construction says in a new report.
The market heating up and real estate companies posting huge profits a few years ago had led to misconceptions about market demand, which encouraged more companies to enter the market despite their lack of experience, the VnExpress website cited the report as saying.
According to the ministry, prices of the mid and high-end segments saw steep declines in 2011 due to abundant supply. Prices of apartments in Ho Chi Minh City, in particular, have fallen around 5 percent since last June.
With prices coming down, developers can start reviewing their business strategies, the ministry said.
It also ruled out a collapse of the market, saying real estate loans only accounted for a small part of the country's total outstanding loans.
According to the ministry, real estate loans fell 13.46 percent as of September 30 compared to the end of 2010.