THE virtual collapse of Vietnam's largest property market has lead to fresh demands for the reform of land regulations that block foreign ownership. Real estate prices in Ho Chi Minh City have plummeted by one-third since speculators - believed to be mostly overseas Vietnamese - began pulling out of the restrictive market in the middle of 1993. But the drop to a more realistic value has had little benefit for expatriates because structural remnants of the communist system prevent market forces dictating prices. Property analysts say the government needs to clear the ambiguity over land ownership, especially with office accommodation. ''Basically, at this stage, there is no office market as such,'' said Helen Cullen, research director at Collier Jardines in Bangkok. Most of the speculative buying was prompted by demand from expatriates, who found that the only available offices were usually in restored villas or temporary hotel facilities. Rentals range from US$3,000 to $5,000 per month for home and office space in Ho Chi Minh, depending on the degree of modernisation. In Hanoi, where the shortage is more acute, rental rates are as high as US$6,000 per month. In a report on Vietnamese real estate released last year, real estate agent Richard Ellis listed 400 foreign corporations that were represented in the southern capital, and calculated annual demand for office space at 45,000 square metres. But the influx of foreign staff involved in business joint ventures under Vietnam's open-door investment policy has been slower than expected. Only about 25 per cent of the approved investment capital has actually been committed, with most projects stalled by financing problems blamed on the inability to use land titles as loan guarantees. The World Bank stated in a report on the land laws released last month that: ''Pledges on collateral are generally unenforceable unless the collateral is physically stored under the bank's control, a situation that is cumbersome and impractical.'' All land is state-owned in Vietnam, though improvements - such as housing - can be freely bought and sold by Vietnamese nationals. Prices for housing first began to soar in 1990, following a massive inflow of offshore funds, mostly from overseas Vietnamese living in the United States, Australia and France. The housing market, which has become the nucleus of the entire property sector, began to decline when speculators - fearing a further slowdown in foreign business joint ventures - pulled out. Land values were only prevented from falling further by direct government intervention which has kept prices artificially high. In November, fixed valuations were declared for all land sectors, ranging from agricultural property to residential, commercial and industrial blocks. The proclamation added: ''For foreign organisations and individuals or enterprises with foreign invested capital, there will be a separate decision specifying land rent rates''. These have not yet been released. Saigon Giai Phong, a daily newspaper in Ho Chi Minh, warned recently that the decline in the housing market had left government agencies with hundreds of depreciating properties, raising fears of an imminent debt crisis. The newspaper estimated that a suburban villa that would have fetched as much as US$100,000 six months ago, would not find a buyer now for $60,000. Only about 10,000 housing approvals were granted in the first half of 1993, compared with more than 50,000 in the same period in 1992. ''House dealers said their revenues (in 1993) are only 30 to 50 per cent of the turnover last year,'' it reported. ''Foreign investors began comparing real estate prices in Vietnam with those in other countries which are competing fiercely with Vietnam for foreign capital inflows.'' Only one office building of international standard, Saigon Business Centre, has been completed in Ho Chi Minh, with a mere 500 square metres of available space rented for an average US$60 per square metre last year. The first tenants have also moved into the US$12 million Office Service International Centre, which will be the first building offering a full range of business communication services. A Taiwanese joint venture, the project has adapted an existing 12-storey complex into a 15-storey office with floor space of 10,500 square metres. Rents range from US$35 to $50 per square metre. Saigon Floating Hotel offers 200 square metres of office space for US$100 per square metre, while other hotels - including the Continental - have business premises for rent at US$60 per square metre. The New World group is expected to include some offices in a 600-room hotel due for completion in 1994-95. Hong Kong and Shanghai Hotels, owner of the Peninsula, is building a Burotel of serviced apartments, hotel units and offices. First Pacific Land has announced plans for a US$75 million commercial complex in partnership with Singaporean interests, which will have 20,000 square metres of rental space.