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

  • Investors’ $14.4M projects approved

    New investments from local and foreign sources continue to pour into Cambodia despite the Covid-19 pandemic remaining a lingering threat to regional and global economies. This comes as the Kingdom’s gross domestic product (GDP) is expected to contract between one and 2.9 per cent this

  • NagaWorld casinos set to reopen, schools to follow

    NAGACORP Ltd has requested that it be allowed to reopen its NagaWorld integrated resorts in Phnom Penh after the government recently approved casinos to operate again, provided they follow Covid-19 prevention measures set by the Ministry of Health. Mey Vann, the director-general of the Ministry

  • Rubber exports stretch 17%

    Cambodia exported 97,175 tonnes of natural rubber in the first five months of this year, surging 17 per cent compared to the same period last year as the Covid-19 pandemic stretches on, Ministry of Agriculture, Forestry and Fisheries official Khuong Phalla told The Post on Thursday. Phalla,

  • ASEM supports Kingdom’s proposal to postpone meeting amid Covid

    The 13th Asia-Europe Meeting (ASEM13) scheduled to be held in Cambodia in November has been postponed until mid-2021 due to the Covid-19 pandemic, a Ministry of Foreign Affairs and International Cooperation press statement released on Saturday said. The decision was made during a two-day meeting

  • Coffee maker roasted for producing fake product

    The Ministry of Interior’s Counter Counterfeit Committee will send a suspect to court on Monday after she allegedly roasted coffee mixed with soybeans and other ingredients, creating a product which could pose a high risk to consumers’ health. On the afternoon of July 2, the

  • Cash handout programme 80% complete

    Minister of Social Affairs, Veterans and Youth Rehabilitation Vong Soth confirmed on Thursday that the implementation of the Cash Transfer Programme For Poor and Vulnerable Households During Covid-19 had been implemented for more than 80% of the over 560,000 families. The programme was introduced one week ago.

  • Cambodia armed with money laundering laws

    Money laundering will now carry a penalty of up to five years in prison while those convicted of financing terrorists will be jailed for up to 20 years, according to new laws promulgated by King Norodom Sihamoni and seen by The Post on Thursday. Comprising nine

  • Where is Cambodia’s exit strategy that can save the economy?

    With the prospect of being slammed by a double whammy, the government is working on an economic recovery plan to deliver it from Covid-19 and the EU’s partial withdrawal of the Everything But Arms scheme in the next two to three years Cambodia is

  • Schools to be reopened in ‘three stages’

    With guidance from Prime Minister Hun Sen, the Ministry of Education, Youth and Sport, is in the process of reopening schools in three stages. But no timeline has been set, ministry spokesperson Ros Soveacha said on Thursday. Soveacha said the first stage will be to

  • Thai border crossings eased

    The Cambodian Embassy in Thailand said in an announcement on Wednesday that Thailand’s government has allowed certain passengers from several countries to enter its borders. The visitors must go back to their country immediately after their duties in Thailand are fulfilled, the embassy said.