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Property sales hit a bump as election nears

Property sales hit a bump as election nears

15-property-1.jpg
15-property-1.jpg

VANDY RATTANA

Construction workers enjoy the view from the top of the Canadia Bank office tower being built on Monivong Boulevard in Phnom Penh. Property sales have slowed over the past month, real estate agents in the captial say, citing pre-election jitters and campaign commitments as the cause.

C

ambodia’s red-hot property market has cooled significantly as

investors fretting over the outcome of July national elections curb a

buying spree that has seen land prices more than quadruple in some

parts of the country, realtors and lawmakers say.

This trend, however, is likely to reverse itself as post-poll jitters die away, they add.

Sung Bonna, chief executive of the Bonna Realty Group, said the pace of

sales had slowed by about five percent since mid-April and prices that

have been on a scorching run for the past three years have flatlined.

While most agree that polling on July 27 is unlikely to be followed by

radical land reforms or policies that restrict investment, realtors say

people remain wary of change – especially political – and this is

playing out in urban and rural property markets.

 “In general, businesspeople involved in real estate are waiting to see

what the situation is after the national election,” Bonna told the

Post, adding that without buyers, property sellers have been forced to

cap prices.

“Also, the rainy season isn’t a good time to go out and see land,” he added.

Realtors, however, including Bonna, predict the elections would

register as only a small blip on the long-term pattern of rising

Cambodian property prices.

“I think real estate will remain a tool that helps the country

develop,” said Cheng Kheng, owner of Cambodia Properties Limited (CPL),

adding that he expected prices to resume climbing a few months after

the polls, once concerns over restructuring subside.

According to Kheng, many of the bigger spenders in Cambodia’s real

estate sector have political party affiliations that were demanding

more of their time as the election approached.

“I think people who have a lot of money to buy land are busy campaigning for the election.”

But the real estate sector slowdown has also hurt an unprecedented

building boom that was a key factor behind Cambodia’s recent

double-digit economic growth.

In general, business-people involved in real estate are waiting to see what the situation is after the election.–

Sung Bonna

Several mega-projects around the capital appear to be languishing in

the financial doldrums, according to economists who say a combination

of domestic political concern and shaky global markets has discouraged

investment in real estate.

“I don’t think construction firms would want to stop their buildings if

they had enough money,” said Kang Chandararot, director of the Cambodia

Institute for Development Study.

“But they seem to be lacking finances to finish their projects,” he

said, adding that inflation had squeezed project funding, with rising

prices for construction materials and labor impacting on new

developments.

Cheam Yeap, a lawmaker with the ruling Cambodian People’s Party (CPP)

that is expected to dominate the July polls, said a CPP-led government

could protect property investments, something that opposition

politicians have demanded as the country attracts more foreign money.

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