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.