The credit tightening, high inflation, and high interest rates may have made many foreign investors cautious about investing in Vietnam's real estate market but some remain interested in it.
Foreign direct investment in the property sector has fallen sharply compared to the last four or five years, according to Phan Huu Thang, an ex-head of the Foreign Investment Agency.
After a record US$23 billion in 2008 it plummeted to $6.84 billion during the downturn last year but still remained the top sector.
But in the first eleven months of this year it has fallen to $464.13 million and trails sectors like manufacturing, electricity, and construction, all of which have topped the $1-billion mark.
Do Nhat Hoang, the current head of the agency, said the Ministry of Planning and Investment would cancel licenses issued to foreign investors who failed to start or did not have the ability to continue doing business.
Vietnam ranks fourth among emerging markets in Southeast Asia in terms of FDI, according to Association of Foreign Investors in Real Estate.
Singaporean investors also regard Vietnam as a top-ranking investment destination in the region.
Deputy Minister of Ministry of Construction Nguyen Tran Nam said the growing urban population was believed to have the ability to boost Vietnam's real estate market.
Khaw Aik Heng, planning director at property consultancy Apave Vietnam & Southeast Asia, said that foreign property investors could be reassured about their investments in Vietnam since large-scale construction of high-rise buildings would resume soon.
"Many foreign investors have left Vietnam, which is a good opportunity for other investors" Peter Ryder, CEO of Indochina Capital said.