The suggestion follows recent moves by two HCM City-based property firms which slashed prices for high-end villas and apartments in District 7 by half, to revive the sluggish market.

Novaland Group on Sunday announced that prices for North Tower apartments, the third phase of the Sunrise City project, would be around VND27 million (US$1,280) per square metre, instead of initial price of VND50 million ($2,380).

The move puts apartment prices around VND1.8 billion ($85,700) instead of the usual VND4-5 billion ($190,470-238,100).

"In this tough period of the market, we have to prioritise project liquidity," said Novaland General Director Phan Thanh Huy.

Last Friday, Phat Dat Real Estate Development said in a notice that the company had cut average prices for apartments and villas at the "The EverRich 3" from VND80-100 million ($3,800-4,760) to about VND40 million ($1,900) per square metre.

Phat Dat General Director Nguyen Van Dat said the move was expected to help the company sell the properties and pull in VND300 billion ($14.28 million) needed to meet 2013 turnover targets and accumulate cash flow for next year.

The companies said they needed to cut costs and restructure human resources to offer the discounts.

Economist Tran Du Lich told Doanh nhan Saigon (Saigon Entrepreneurs) online that HCM City has nearly 12,450 unsold apartments, the majority of which were high-end.

Transforming the apartments into social houses, a method local authorities and some investors were implementing to deal with the inventory, needed careful consideration to avoid even more negative impacts.

"I support Government intervention, but [we should consider that] demand mainly focuses on properties priced below VND1 billion ($47,600) in Ha Noi and HCM City and below VND500-600 million ($23,800-28,570) in provinces," Lich said.

"For the high-end segment, we shouldn't hastily interfere but let the market regulate itself. Slashing prices, even accepting losses, is the best solution to boost sales at present," he said.

HCM City Real Estate Association Chairman, Le Hoang Chau, said the recent price reduction could help property firms prepare for more open policies that would allow more domestic purchases by foreigners and overseas Vietnamese under Government consideration.

Municipal Department of Construction director Tran Trong Tuan told local National Assembly members on Friday that property sales were still quite good in some parts of the city where infrastructure and living conditions had been improved. ― VNS