WITH an abundance of properties on the market as a result of the construction boom, you would think that it would be a true buyer’s market in Siem Reap, but the market does not always function according to the usual rules.

The roads in and out of Siem Reap are a testament to the massive expansion the town has seen in the last few years.

Bruno L’Hoste has lived in Cambodia since 1995. He first arrived here as a photographer based in Phnom Penh, then moved to Siem Reap, and in 2003 established the acclaimed Tigre de Papier, one of the first restaurants on Pub Street and still thriving today.

He has witnessed and experienced the different phases Siem Reap has gone through.

“The real estate boom in Siem Reap really began with UNTAC.Then you could build a big 4-6 bedroom villa for US$50,000 to $60,000. When you had all these guys coming into town with huge salaries, who didn’t care what they were paying, the owners of the villas were asking for huge rents for their properties, up to $6,000, and a year in advance, and they were getting it,” said L’Hoste.

“They were then using that money to build another villa and renting that out, and so on. It was crazy because there were too many people with too much money. Today those villas are still there, but now they rent for $1,200 to $1,300.”

However, there is not much of a market for them, says Vong Thinonn, of Cambodia Angkor Real Estate. The properties that rent out quickly now are those at $400 to $500.

“The market is very strange”, says L’Hoste. He points to a photo for one villa he has just succeeded in renting out.

“It took more than three months to rent that out”, he says of a three-bedroom villa on the outskirts of town that went for $1,300, while slightly further out, however, it’s possible to rent five-bedroom villas with gardens for less than $500. In town, it’s even possible to rent a 16-bedroom guesthouse for $1,500 per month.

Having seen the high returns they could get at the height of the boom in 2008, owners are extremely reluctant to adjust their prices to prevailing market forces.

“They would rather see the property go empty for two or three years than drop their prices. This is a problem for the owners, too, because we’re in the tropics, the concrete deteriorates and everything goes bad,” L’Hoste said.

A good example of the glut in shop-house developments in Siem Reap is the Charming Tourist City on the road towards Angkor Wat. Construction on this mini-complex started more than two years ago, and today there must be almost 200 units, more than two-thirds of which appear to be empty, with printed “To Let” signs on their windows.

This complex alone and many others like it should have led to a significant drop in rental prices in Siem Reap but it hasn’t. Normal market forces don’t operate in the face of owners’ pride.