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Land division segment in jeopardy due to pandemic

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Transactions in Phnom Penh’s land division projects could fall by as much as 50-70 per cent compared to last year. Photo supplied

Land division segment in jeopardy due to pandemic

Real estate transactions in Cambodia’s land division projects remain in jeopardy more than nine months on since the onset and spread of Covid-19, experts have said.

The land division segment had experienced an unbridled boom in the years leading up to the outbreak with prices on a steady march upwards, above all in Phnom Penh and surrounding areas, they said.

Land division refers to the process in which developers create new allotments by splitting land into smaller parcels with separate lot titles. This is done to boost the value of their land holding by leveraging the development potential of their property.

Chailin Sear Realty Co Ltd (CL Realty) CEO Sear Chailin told The Post on Wednesday that the pandemic has led to a nationwide slowdown in land division market activity.

Though their profitability had diminished over the period, he noted that the prices of the plots had by and large not fallen.

“The land division market has yet to show an inkling of recovery. As I see it, in 2020 as a whole, it cannot be as good as it was last year.

“Transactions in Phnom Penh’s land division projects could fall by as much as 50-70 per cent compared to 2019, when the market was very bullish,” Chailin said.

But with nearly 20 years of experience in real estate, Chailin contends that land division is a desirable strategy to develop the national economy and provide affordable housing for the Kingdom’s low- and middle-income earners.

Ven Chhunheat, board director of Dey Thmey Real Estate Co Ltd, which has developed several land division projects in northern and western Phnom Penh, acknowledged that sales have declined slightly since the beginning of this year but expects the situation to normalise following last week’s Pchum Ben festival.

He said: “Land division sales to a sharp dive during the replacement Khmer New Year and Pchum Ben holidays, but after a month, I expect it to recover as Covid-19 eases somewhat.”

He added that prices of the subdivided plots had not increased much against last year.

Meanwhile, Chim Sochea, a developer of a project along National Road 51 in Kampong Speu province’s northeastern Oudong district, said he did not see a decline in sales.

In contrast, he said some customers had ramped up their purchases, taking full advantage of the Covid-19 era’s slowed price increases and discounts.

“For my money, today’s buyers of subdivided plots will have a great chance of reaping in heftier profits in the future.

“With the gradual improvement of the Covid-19 situation, I expect the market to revive by November or early December,” Sochea said.

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