Property experts in Cambodia said that this year investment in the property and construction sector will increase by 20 per cent from last year, because there is still profitability in the sector, even if it is not above levels seen in 2007.
Those with remaining capital from the previous property boom, and other investors, are now starting to invest in land and houses, while Cambodia’s economy is recovering with political stability and Cambodia’s chairmanship of ASEAN other contributing factors.
Cheng Kheng, the director of CPL Property Co. Ltd, said that this year offers a golden opportunity for those who wish to invest or buy property in Cambodia, because the demand for property in the market is generally growing in the cities as well as the provinces nationwide. He added, “Those who want to invest or buy houses for residency should buy right now because the price of property hasn’t increased significantly yet, while banks are offering an opportunity for the borrowing of up to 70 per cent to invest or buy houses.”
So Phonnary, Executive vice president of ACLEDA Bank, said that banks are the core driver of the investment in property in Cambodia, through loans for the investment or purchase of houses. She added, “Korean banks or major banks focusing on house development loans do provide a lot of money, but ACLEDA can provide a loan of only 15 per cent.” However, she did not give a clear number of borrowers, only saying that the borrowers for residential developments have doubled since last year.
Dith Channa, the director of VMC, said that people with money in hand wishing to invest and buy residential properties are investing and buying “a lot” right now. As the investments are just starting, they will earn a lot of profit when the market rises sharply. He added that the investment in house construction, condominiums and office space is also on the rise.
Even though the property market has risen a little, many of those who wish to invest or buy do not have the confidence yet. Some think that prices may still fall because the sector is still recovering this year, and if they invest or buy, it may be difficult to turn a profit.
Cheng Kheng echoed the same concern, saying that investors do not want to spend and wait too long for profit. But in reality, he said, the investment in the property and construction sector right now is not like 2007, because now there are real investors from China, Russia and Japan. Moreover, local investors also have enough capital for investments. He added that residential investment projects this year have risen significantly, between 20 and 30 per cent.
He added that the property and construction market in Cambodia has been rising since 2000, but it fell in mid-2008, until 2009. He added that at that time, billions of dollars were tied up, because land and houses were not in demand.
Some land experts and economists also say that the property market has been recovering. Such claims were based on the good economic growth this year, and anticipated growth in the next few years.