Home prices in Vietnam are too high and cutting prices is the only way to help developers clear their stock, Chairman of the Ho Chi Minh City Real Estate Association Le Hoang Chau said.
"Most real estate companies are now in critical condition," Chau said, noting that they are caught in a double whammy of high interest rates and very low home sales.
"Property firms have cut prices, accepting no profit or even losses. In fact all companies understand that they have to accept losses," he said. "If they don't sell now, they will face foreclosure, which is even more damaging to their reputation and their pocket.
"This is a bitter pill that they have been swallowing," Chau said.
However, Chau admitted that despite recent cuts, home prices in Vietnam are still too high. An apartment in Ho Chi Minh costs around VND600 million (US$28,800), while a similar home in Indonesia will only a quarter of that price.
If land prices, construction costs and administration fees are reduced, local home prices will fall further, he added.
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