At Pochentong, past Phnom Penh International Airport, farmland is giving way to new housing and industrial projects.
Sok Poy has lived in his village on the outskirts of Phnom Penh for nearly 15 years. In that time, the 65-year-old has seen local land prices increase from $3 per square meter in the 1990s to over $50 today, fueled by a boom in residential and industrial development that is slowly transforming the region around the capital.
For many villagers in Samrong village, about 20 kilometers from the city, the lure of high land prices has been too good to resist.
“Many villagers are getting out of farming,” said Poy. “People are selling their land and moving to other provinces to farm there.”
Those who remain, like Poy, are now as likely to make a living from business as they are from traditional agricultural pursuits.
In Phnom Penh Thmei district northwest of the city, demand from large-scale housing developments such as Grand Phnom Penh International City and Camko City is driving prices up even further, according to Engkry Chheang, deputy manager at the Phnom Penh branch of Cambodia Angkor Real Estate.
“What sold three months ago for $29 per square meter in Phnom Penh Thmei is now going for $34.50,” he said. And trends seem set to continue.
The company expects property prices to continue growing at 10-15 percent a year until 2010, according to Ros Hay, director of Cambodia Angkor Real Estate.
“Cambodia has maintained a stable political situation and is more and more peaceful from day to day … and investors have trust in the Cambodian government’s economic policies,” he told local TV channel TVK in an interview broadcast March 4.
For villagers lucky enough to find themselves within the 30km metropolitan zone, the rewards can be handsome – and unpredictable.
Yet Narom, 30, sold a plot of land in Samrong for $5 per square meter in 2007, planning to buy farmland in Kampong Speu province, only to see her former land’s value increase to about $15 a square meter within 12 months.
“The new owners are waiting for a higher price,” she said. “Then they will sell.”
Some plots of land in the area are returning as much as $40 per square meter, she added.
The boom in industrial real estate is leading increasing numbers of villagers to trade in the uncertainties of life on the land for the risks and rewards of speculation in the property market.
Chat Srey, 47, from Chumka Sbeng village, has been buying and selling land on a small scale since 1992, to supplement the living she earns from farming. In that time, she has witnessed the exponential increase in prices first hand.
“Many factory bosses and rich buyers come here looking to buy land. Things have become much more expensive and I worry that there will soon be no land left,” she said.
Poy also claims to have sold “five or six” pieces of land since 1993 for a total of $200,000 – money that he has reinvested to secure his family’s future.
Small-scale speculation of this nature is likely as old as the land itself. However, Chheang says speculators are increasingly rich entrepreneurs from Phnom Penh.
“Many businessmen are by-passing real estate brokers and purchasing land directly from the owners. They hold on to the land for maybe five years and then sell to make a profit,” he said. “Some are well-connected and know when to buy and sell.”
The Ministry of Land Management, Urban Planning and Construction could not be reached for comment. But the municipal government’s Strategic Orientations report for Phnom Penh, published in July 2004, envisages “extend[ing] the city within the radius of 30km around the old centre” by 2020 and has made plans for 3,000 hectares of “economic activities” to be included within a 375-square-kilometer area around the city.
The municipality expects Phnom Penh’s population to grow by 4.14 percent a year until 2020, according to the report.