Property-sector decline sees more agents drop out of business
THE number of real estate and valuation firms granted permits was down 54 percent in two years, according to the Ministry of Economy and Finance.
In January 2008, 74 companies were licensed to carry out business in the Kingdom. In the same month of 2009, the number was 43, but by January 2010 it was just 34, Mao Pov, deputy chief of the real estate division at the finance ministry said Thursday.
The cost of a one year licence and a certificate is 700,000 riels (US$167) – as defined by a 2007 prakas, or edict.
Sung Bonna, president of Bonna Realty Group and president of the National Valuers’ Association of Cambodia said some firms had been hurt by the lull in the property market.
“[Some small real estate agents] have not applied to renew their licences because the sector has been affected by the world economic crisis. Companies have decided to halt or postpone their business,” he said.
Sear Chailin, director of Visal Realty Co, said that his company’s licence had expired.
“I am going to stop renewing my licence temporarily because my business is running very slowly,” he added.
One real estate agent, who preferred to remain anonymous, cited a need to pay high informal costs to avoid delays as a reason for falling renewals.
Most firms use brokers as go-betweens to speed up the process. The agent said the practice added to the overall cost, but the brokers were close to officials and so could navigate hurdles.
Seng Sopheak, valuation manager of Cambodia Property Limited (CPL), said he renewed his licence in August.
“We don’t want to work without a licence, but we must continue, despite the fact the property market is still no better,” he said.
He said his company paid about $1,000 a year to renew licences through a broker.
“In my view, that is not expensive for big real estate agents, but it is expensive for small real estate agents,” he said.
Norng Piseth, director of finance at the finance ministry’s Real Estate Division, denied that informal charges were required to process licences and certificates, saying that agents simply preferred to use brokers and lawyers.
Officials said they hoped the number of registered real estate agents might pick up.
Mey Vann, director of the Department of Industry and Finance at the Ministry of Economy and Finance, said: “If the economy improves this year those real estate and valuation companies will come back and apply for a renewal or a new licence.”
Norng Piseth emphasised that any company operating without a licence would be fined 5 million riels.