While political deadlock following July’s national elections have some industries concerned, real estate experts say their sector has not been affected and they don’t foresee any risk.
“Since the beginning of election campaigning through the deadlock we have now, there has been no negative impact on real estate and land prices in Cambodia, unlike other countries where a political party has rejected the election result,” said Cheng Kheng, president of Cambodian Valuers and Estate Agents Association (CVEAA).
“Real estate growth during the first half of the year is hard to measure because we don’t have enough data to look at, but if we base findings on tax revenue from real estate sector collected by the Ministry of Economic and Finance, we can estimate that it grew 70 per cent in this first half from a year earlier. This shows the growth of real estate market in Cambodia,” he said.
With nearly 20 years’experience in real estate, Kheng said the potential of Cambodian real estate is still strong and Cambodia is a good destination for real estate investors due to lower land prices compares to those in other countries in the region. .
For city land, the price is much lower, about 50 to 60 per cent lower, than in other countries, according to Kheng. In the capital, the price of land along main roads such as Monivong and Norodom boulevards was priced at $3,500 per square meter. In Bangkok and Ho Chi Minh, however, land along major thoroughfares was about $20,000 per square metre and $25,000 per square metre.
What Cambodia could, though, is stronger real estate laws,
“Low land prices offer opportunites for foreigners who are looking to invest in Cambodia … But strong real estate laws in Cambodia would build more confidence among those investors,” he said.
“I want to see a new government being formed as soon as possible and Cambodian politicians take advantage of the golden opportunities for Cambodia to attract more investors,” Kheng said.
“Another main factor boosting Cambodian real estate market in recent years is home loans from commercial banks, especially targeted to adults who have businesses and good jobs,” he said.
Cheng Kheng said Cambodians, especially young, successful businessmen are opting to buy space in condominiums to raise their families, a trend increasing particularly the among middle class. They have become more willing to forgo the private family home and instead live among a community in high-rise buildings because of their convenience, safety and the fact it’s becoming more fashionable.
“Through my own experience, about 60 per cent of customers who buy condominium are Cambodian. In other emergin countries however those who are staying and working in such building are foreigners. But in the future when there are many condos and apartments and more foreigners coming in Cambodia, the figures here will more reflect those in other markets.”
There are 18 condos in Phnom Penh so far. Most of them are located in Beoung Keng Kang, Tuol Kok, ,and along the riverside. Most of those projects are completed and almost occupied, while some projects are still in progress.
Kheng said the most important thing that the Cambodian Valuers and Estate Agents Association (CVEAA) needs to accomplish is to establish a registery for property for sale and rent in Phnom Penh that would make it easier to track trends and analyse the property sector.
As a president of CVEAA, he is cooperating with City Hall authorities to get all the data of property and land for sale, rent and trade. The association already has the staff to record and analyse the data.
“After that both the government and CVEAA can use this data to analyse the growth or contraction of the property market, which would make it easier for foreign investors who wish to invest in real estate in Cambodia. In addition, the government will be able to easily collect tax in this sector,” he said.
Kheng also called for cooperation from government and encouraged real estate companies to get licence. He also called for restriction on investors who do not have a licence and tax.