At the end of this year, Cambodia will be integrated into the ASEAN Economic Community. With many investors unsure of how this will effect the property market, Post Property spoke with Chrek Soknim, CEO of Century 21 Mekong, about whether the ASEAN integration would help or hinder one of the Kingdom’s fastest growing industries.
What do you think about the ASEAN Integration? Is the Cambodian property market ready for it?
At the end of the year, the ASEAN Economic integration will increase the Cambodian economic sector and link the country members’ cultures together. It will have the free flow of goods and labour, and, obviously, more Cambodian labour force will [migrate] out to other countries. However, skilled workers from the member countries will come to fill in the job gap here.
Currently, our property market is preparing for the integration, but it depends on whether individual developers have good products to compete with the other countries or not and whether investors could have more choices for buying in Cambodia or the other ASEAN countries. At the same time, we have to compromise the ASEAN culture since the way [every country lives] is different according to their [own country’s] culture, thus developers have to understand this and serve the ASEAN market.
Will it help invigorate the Cambodian Real Estate market? How?
I think it is beneficial for Cambodia that a new technique and methodology of construction will be brought to the country. The modernity will bring high-rise buildings with quality to Cambodians. There will be more competition among the member states during the integration. Even if there will be more competition that can impact Cambodia in the short-term, it can be beneficial for the country in the long-term. I see that Cambodia has started to focus on the quality of construction, which the country has to have more of as the competition grows.
Do you see if there are enough property experts in Cambodia ready for the ASEAN integration?
I think that in the Cambodian real estate sector, we do not have enough property experts or agencies. We learn the skills from one person to another. Before, we didn’t have a real estate university either, but now we have Century21 University, which has a property education system so people can become property experts. However, they cannot serve the whole market here right now. In the future, there will be enough for the market.
We have observed that many property developers expect to see a positive result from the integration, such as the free flow of skilled labour. Will the ASEAN integration help Cambodia as most developers expect it to?
It will help. However, property developers have to have high quality products for consumers. Local developers will face more competition because international developers will come to develop their projects here. Consequently, investors will have more options.
Local developers must strengthen their construction quality not just for local investors but also for the competition in the region.
While countries compete for foreign direct investment (FDI), there should be more competition in the property market.
Will Cambodia be impacted from the competition?
Simply, there will be a small or large scale impact depending on the developers’ management. As the market takes in more competition, we also want to attract foreign developers to come to our country at that time so it will impact local developers. If local developers do not follow the market demand, they will fail.
This month, two Vietnamese laws will take effect in a bid that could shake up the regional competition, while Indonesia is debating similar legislation. Will it impact Cambodian market as well?
Naturally, if they open their market, investors will go there. Since there will be more options, smart investors will balance the cost and profit between Cambodia and Vietnam and decide what country they will [invest in]. It depends on the government’s work quality and how good the government is at lobbying foreign investors to come to the country.
I think Cambodia seems to have more potential for ASEAN since Cambodia is located in the middle of the ASEAN region, so setting up a head office here would make it easy for [investors] to transport their products to other countries, and transportation costs are lower. Cambodia has never had an earthquake or natural disasters, so that is another good factor Cambodia has over neighboring countries.