THE value of investments approved by the government for residential property declined an annualised 47 percent in 2009.

According to official figures released by the Ministry of Land Management, Urban Planning and Construction Thursday, it approved 2,836 projects in 2009 worth an estimated US$201 million, compared with the 7,220 developments worth $381 million approved in 2008 – a decline in value of 47.2 percent.

According to the report, 254 villas worth $62 million and 2,582 flats worth $138 million were given the go-ahead last year. In 2008, 1,485 villas worth $154 million and 5,735 flats worth $226 million were approved.

Lao Tip Seiha, director of the department of construction at the Ministry of Land Management, Urban Planning and Construction, said that the residential development market in Phnom Penh had slumped because direct capital investment from foreigners had slowed during the economic crisis.

“Now, most capital investment comes from local investors,” he said.

Lao Tip Seiha, who said he believes the construction sector may see a step-by-step recovery this year, added that current building work is not fulfilling demand for residential accommodation needed for the increasing population of Phnom Penh.

Concern about the need for housing has been highlighted by other officials this week.

Chhay Rithisen, director of the Office for Urban Affairs in the Municipality of Phnom Penh, told a workshop at Russey Keo district hall Wednesday that with about 10,000 new families coming to the city each year, Phnom Penh needs to promote investment for housing developments, especially for poor people.

According to some, the signs are good for recovery.

Kerk Narin, general manager of Bonna Realty Group, said: “According to our research, construction activity is getting better in 2010.”