Property prices in Vietnam have grown out of proportion and far above their real value as the market has not been managed properly, a group of government advisors have said in a report.
According to the report, which has been sent to Deputy Prime Minister Hoang Trung Hai, the local real estate market has been left uncontrolled. Many homebuyers now accept any prices and conditions offered to them due to insufficient information, the report says.
A square meter of housing at a 20-25 story residential building in Hanoi, for instance, costs some VND16.7 million (US$880) to build but common prices can be as high as VND32 million ($1,680).
The report also says urban migration has expanded housing demand in big cities around the country, with seven million people in need of a combined housing area of 150 million square meters.
Apartments priced at under VND18 million ($950) per square meter will attract homebuyers in Hanoi and Ho Chi Minh City, the report assesses.
It also predicts the market will recover this year, with more investment flowing to some provinces including Dong Nai, Binh Duong, Vinh Phuc and Hung Yen, which are close to either Hanoi or Ho Chi Minh City and have improved public infrastructure.
Around 90,000 new apartments are expected to come into the market this year, the report says.