A herd mentality among developers is to blame in large part for the ongoing slump in the housing market, but the government has also been inconsistent in its management of the sector, Construction Minister Trinh Dinh Dung says.
In an interview published by news website VnExpress Sunday, Dung said, the Ministry of Construction should take some blame for the crisis, but developers are responsible for targeting the wrong market segment.
"The current condition of the real estate market is partly due to inconsistent management by the government in terms of planning and overseeing the development of the market. However, it must be said that real estate companies just follow each other," Dung said.
The government will not neglect the market, but property companies need to review their business strategies and aim at the right segment, the minister said, implying developers should focus on more affordable projects.
Vietnam's property market is believed to be going through the toughest period yet.
Some experts said the government's credit squeeze has create financial difficulties for both developers and homebuyers, while others blamed the current situation on an oversupply of luxury products that fail to cater to the real demand of most people in Vietnam.
"The situation is very tough now, and for at least another six months, I think we will continue to struggle," Dung said.
"The bright spot of the market next year will be the low-income housing segment. But prices have to be set at a resonable level to suit the public," he said.
The minister also said falling home prices was a good trend for the market now.