Gold sellers have seen sales fall more than 50 percent as property
prices stabilise and land owners see a drop in real estate sales
GOLD sales in Cambodia have slumped in recent months on a drop in property market earnings, suggesting the global financial crisis may have tangentially affected the Kingdom's economy.
Kim Hong, owner of a jewellery shop in Phnom Penh's Central Market, told the Post that sales have fallen more than 50 percent compared with earlier this year.
"I currently sell about 15 damlung [26.67 damlung equals one kilogram] a day, which is less than earlier this year, when I could sell more than 50 damlung a day ... even though the land market was booming and the price of gold was high," he said.
Gold, rather than bank accounts, is a traditional store of wealth for Cambodians. But investment in gold often corresponds to the property market.
"The fluctuation in the price of gold has not affected customers' decisions. The land market has been more important," Kim Hong said.
The price of gold reached nearly US$1,250 per damlung in March 2008 but stabilised during the P'Chum Ben holiday at $1,060 per damlung, he said.
Kang Chandararot, president of the Cambodian Institute of Development Study, attributed the slump in Cambodia's property market to dwindling investments from Korea and China.
"The gold business is slow. Their money is buried in land," he said. "It is hard to predict what will happen in the future because everything depends on the government's policy on national development projects."
Sung Bonna, president of the National Valuation Association of Cambodia, blamed the Kingdom's slowing land market on recent legislation requiring investors secure additional licences and larger cash reserves for development projects.
Cheng Kheng, managing director of Cambodia Properties Ltd, said the gold and land markets are closely connected.
"I think the money of most business people is invested in the land market, and if current trends continue, the land market could collapse."