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Logo of Phnom Penh Post newspaper Phnom Penh Post - Property may sag for three years: official

Property may sag for three years: official

CAMBODIA'S sagging real estate market will not recover for two or three years, according to Hang Chuon Naron, secretary general at the Ministry of Economy and Finance

He added that the global financial crisis and the credit-fueled construction boom in Cambodia would exacerbate the problem.

"I think we will face the problem of a long-term standstill in the Cambodian real estate market," he said.

"However, it won't affect the Cambodian economy because the government doesn't allow banks to loan more than 15 percent of their total to property projects," Hang Chuon Naron added.

Cambodian commercial banks lend about US$2.5 billion per year.

Sung Bonna, president of the National Valuation Association of Cambodia, said the Cambodian real estate market is down about 20 percent this year and could drop further.

"I think that real estate market will recover next year because the global financial crisis has gradually receded," Sung Bonna said.

The real estate market in Cambodia started to decline in July this year before the national election.

Opposition lawmaker Son Chhay said foreign investment was declining quickest among Koreans and diasporic Cambodians .

"I suspect that Cambodian economic growth might drop to only five percent if the real estate market continues to deteriorate," he said. 

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