Leading agency Bonna Realty Group says that land prices fell about 50 percent from previous year in first six months of 2009
LAND prices in Phnom Penh have dropped by almost half from the first six months of 2008 according to figures released by a leading realtor.
Sung Bonna, president and CEO of Bonna Realty Group, said commercial land in the city centre was around 46 percent lower in the first six months of this year compared to a year earlier. Prices had dropped from an average US$5,050 per square metre to $2,750, he said.
Prices for residential areas showed a smaller decline, down 38 percent from $2,600 to $1,600 per square metre over the same period.
He said demand had picked up in the past couple of months after dropping to almost zero in the latter half of last year, but he did not expect prices to begin recovering until 2011.
"Our research over the last two months shows that people are again hunting, and asking to buy land or houses," he said. "However, I forecast that land prices will continue going down until they reach the bottom at this year's end."
The cost of residential, commercial and industrial-zoned land on Phnom Penh's outskirts had also dropped around 50 percent in the first half of the year from a year earlier, though prices varied depending on zone or location, said Sung Bonna, who is also president of the National Valuers' Association of Cambodia, though the figures released where compiled by his real estate firm.
Visal Real Estate Co Director Sear Chhailin said his company's figures showed a drop of around 50 percent in land and house prices. Real estate transactions conducted by the company were at only about 10 percent of the level seen in the first half of 2008 as potential buyers continued to wait for prices to drop further, he said.
"We forecast that in the second half of this year, land prices will continue to drop, and buying and selling activity will remain limited because it is the rainy season, making it difficult to either travel or build," said Sear Chhailin.
CPL Cambodia Properties Limited Managing Director Cheng Kheng said that land and house prices had only dropped between 20 percent and 30 percent in the first half of this year.
"For normal real estate trading, it is impossible for prices to drop up to 50 percent," he said. "Declines of a half are only for firesales to repay debts or bank debts," he said.
He said his company had brokered 70 land sales and 160 house sales in the first half of this year. "If compared to the first six months of last year, it's only 10 percent of the volume of real estate buying and selling activity," he said.