Logo of Phnom Penh Post newspaper Phnom Penh Post - Research shows trust in property sector low

Research shows trust in property sector low

Research shows trust in property sector low

But survey tips lending and foreign property law to spur growth.

Buyer confidence in the real estate market has yet to recover from the shock of the economic crisis, a study has found, but developers and other businesses see positive signs on the horizon.

In a survey carried out by Indochina Research Ltd (IRL) in February and March, around 55 percent of potential buyers said they would wait more than two years to invest in the property market, with just 11 percent considering buying in the next 12 months.

Around 46 percent of the survey’s 75 Cambodian participants, whose monthly income was more than US$1,000 a month, were confident about economic revival in the Kingdom, but half said that the real estate sector would not recover for another two years.

A total of 63 percent were not considering investing in any major projects, including Camko City, Borei Phnom Penh Thmei and Borei Peng Huort.
IRL’s research was presented to a seminar of more than 200 investors and real estate workers at Raffles Hotel Le Royal in Phnom Penh on Friday, prompting discussions about the effectiveness of marketing campaigns.

“Confidence is key and actions should be taken to send out positive signs to real estate consumers,” IRL General Manger Laurent Notin told participants.

Edwin Vanderbruggen, director of regional tax practice at the DFDL Mekong law firm, who coordinated the meeting, called the lack of awareness of major projects “remarkable”.

The IRL survey also found that 65 percent of respondents believe that the market is a good place to buy property, providing a source of confidence for at least some participants.

The crisis corrected the domestic market, where land speculation had become the norm, Daniel Parkes, country manager of CB Richard Ellis (CBRE), said Friday. It also reduced the number of properties being built.

“That isn’t a bad thing,” he said. “If all the slated developments had come forward, we would probably have been looking at an oversupply.”

CBRE estimates a property demand for more than 104,000 square metres of office space, Parkes told participants, advising them to price their property competitively.

“I think land prices are coming back to reasonable values, and I can see them returning to normality,” he said.

Among other positive signs for the sector was the increased role of banking and the potential for foreigners to own residential property, participants said.

Around 29 percent of those surveyed by IRL said they would use bank loans for property investment.

ANZ Royal Bank started offering mortgages earlier this year after they were withdrawn in the economic downturn.

Friday’s seminar came as the National Assembly debated a law that would allow foreigners to own private residential property – at least, above the ground floor.

“For sure, this would help the market to be more open to foreigners,” said Guillaume Massin, head of the Cambodia real estate practice group at DFDL Mekong.

MOST VIEWED

  • US think tank warns of China's 'ulterior motives'

    A US think tank on Tuesday warned that spreading Chinese investment in the Indo-Pacific follows a pattern of leveraging geopolitical influence at the expense of the nations receiving investment, including Cambodia. The report looks at a sample of 15 Chinese port development projects, noting that the

  • More than three tonnes of ivory reportedly bound for Cambodia seized in Mozambique

    A total of 3.5 tonnes of ivory reportedly bound for Cambodia was seized by authorities in Mozambique late last week, according to the NGO Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES). CITES' information was based on a report from the

  • Defence Ministry denies weapons in smuggling case came from Cambodia

    After a Thai national was arrested last week for allegedly smuggling guns from Cambodia to Thailand, Cambodia's Defence Ministry has claimed the weapons seized during the arrest are not used in Cambodia, despite the fact that both types of rifle seized are commonly found in

  • Shipwreck found off coast of Koh Kong

    Royal Cambodian Navy researchers are working to identify a decades-old shipwreck found earlier this month off the coast of Koh Kong province. Divers found the 70-metre-long wreck on April 4 about a mile from Koh Chhlam island, according to Navy officials. Deputy Navy Commander Tea Sokha,