The State Bank of Vietnam 's tightening of monetary policies will benefit powerful foreign real estate investors and hamper local firms, according to property market analysts.

SBV and Government efforts to curb inflation since February this year, have made it difficult for real estate developers to access credit, leading to a decline in property projects.

Last May, CapitaLand announced that its subsidiary-CapitaValue Homes had bought a 65 percent stake in Quoc Cuong Sai Gon JSC for 121.2 billion VND (5.9 millionUSD).

In addition, CapitaValue Homes purchased three other projects in Vietnam , including the acquisition of An Khang real estate company in District 2, HCM City .

According to HCM City authorities, there had been 20 real estate transactions between foreign, joint venture and domestic firms this year.

In Hanoi , there have been fewer M&As but the trend is still up on last year.

Georgia ( US ) - based Archi Group now holds a large number of shares in real estate developers Song Da River Tourism Company and Kim Boi Tourism JSC.

Nguyen Van Duc, deputy general director of property firm Dat Lanh, said buying and selling was mostly conducted through banks and that tightened lending policies had made life difficult for local firms.

Duc added that there was a real danger of foreign firms cashing in on the depressed Vietnamese real estate market.

Duc fears that most real estate projects will fall into the hands of foreign investors. He attributes the difficulties the real estate market is facing to an imbalance in supply and demand. He said most people could not afford to buy an apartment costing 2 VND - 4 billion VND (96,000 USD -193,000 USD) without taking out a mortgage. As a result of a tightening in bank lending, a large proportion of mid – to high-end flats cannot be sold, he said.

Neil MacGregor, deputy director of Savills Vietnam , said increasing inflation, economic instability and high lending rates would result in a spurt in M&As in the real estate market this year.

Le Hoang Chau, chairman of the HCM City Real Estate Association, said M&As would enable local firms to weather tough economic times.

William Young, MIPIM ASIA's senior project director, said at a recent press briefing in Hanoi that Vietnam was an ideal destination for real estate investment this year.

He predicted that in the next two to five years, Vietnam 's real estate market would become increasingly attractive due to growing liquidity.

Within the short term, investors would chiefly plump for apartments, trade centres and hotels, Young added./.