The government announced a more than 20 percent increase in approved construction projects last year over the year before, but not all the benefits of the booming industry are being passed on to Cambodian workers and property buyers, according to industry insiders.
The annual report from the Ministry of Land Management, Urban Planning and Construction released on Tuesday showed that 3,052 projects were approved in 2017, with a value of $6.42 billion. That’s up from 2,405 projects at a $5.25 billion value the year before.
Kim Heang, chairman at Cambodian Valuers and Estate Agents Association, welcomed the growth in approved construction projects, but noted that actual amount of construction appeared to decrease last year.
“I am happy to see the growth of approved construction projects in 2017, but I wonder whether those who got the license from ministry will implement the construction plan or not,” he said today. “As far as I’ve seen, the new construction projects in 2017 were less than 2016 and 2015.”
Chiv Sivpheng, secretariat at the Cambodia Construction Association, credited the growth in approved projects to political stability and the overall economic growth rate, which has proven to be an effective draw for foreign investment, particularly from China, South Korea and Japan.
He also noted that the lack of skilled labour in Cambodia was a challenge that the sector had to address, as most of the technical jobs in the industry were being filled by foreign nationals.
“Since the construction industry grows well day by day, we could face a lack of labourers and local expertise to meet demand,” he said.
The construction boom also doesn’t appear to be helping Cambodian homebuyers, according to Heang. He noted that while an increase in the supply of new residences should result in a gradual lowering of prices, that isn’t the case in Phnom Penh, where the majority of buyers are foreign investors.
“The price of house and condominium should be decreased when there are a lot of houses and condominium that keep growing,” he said, “but [Cambodians’] ability to afford a house is actually decreasing.”