A study by Nomura Research Institute (NRI) of Japan estimated the value of Vietnam's property market at 21 billion USD, a far cry from that of some of its neighbours.

The study provided estimates for the value of the property markets of Japan (2.67 trillion USD), Singapore (241 billion USD), Indonesia (189 billion USD) and Malaysia (84 billion USD), along with those of Thailand (89 billion USD) and the Philippines (48 billion USD).

Can Van Luc, Deputy General Director of the Bank for Investment and Development of Vietnam (BIDV), explained that the country's real estate market was established and developed on a small scale in the past 10 years, in comparison with those of other countries in the region.

However, exactly 70 percent of capital invested in the sector came from bank loans, and 65 percent of collateral was also in the form of property.

As of December 31, 2013, real estate loans amounted to around 262 trillion VND (12.5 billion USD), accounting for 8 percent of total outstanding loans. In addition, property lending in Vietnam was also 2.5 times higher than the international standard.

Luc said foreign direct investment (FDI) in the sector has recovered following several years of sharp decline.

According to the Ministry of Planning and Investment's Foreign Investment Agency, total registered FDI capital in the sector in the first seven months of the year reached 1.13 billion USD, representing a 65 percent year-on-year increase.

The market is finding it difficult to mobilise capital from people as real estate prices in Vietnam remain high, say the experts.

Dang Hung Vo, former Deputy Minister of Natural Resources and Environment, said one of paradoxes of the market was that the average price of houses was 25 times higher than the average annual income of labourers, while that of other countries was merely two to four times higher.

Vo said that if workers saved 25 percent of their income, it would take 100 years to buy a house. For social housing projects, the time would be 10 years.

He added that an oversupply of high-end apartments has created a high inventory and bad debts, alongside a lack of low-cost housing projects.

However, Sigrid Zialcita, Managing Director, Research Services for Cushman & Wakefield in the Asia Pacific, said the number of middle-income families in the country has doubled in the past five years, and this development could lead to an increase in the sale of houses.

She added that Vietnam's economy was developing rapidly and was poised to attract multinational companies, thus contributing to the growth of the country's office market.-VNA