Being the president of the Cambodian Valuers and Estate Agents Association (CVEA) is a busy but rewarding job for Kim Heang. The organisation, which represents valuers and real estate agents, has helped open up Cambodia’s real estate industry to international investors. Heang sat down with Post Property to talk about the risks relating to unlicensed operators and the current state of the local market.
Non-licensed real estate companies still operate in the Kingdom. How can people distinguish between reputable and non-reputable firms?
I want to clarify that licensed companies are the ones that have already registered with the Ministry of Commerce. That’s what we call a company. For a real estate company to be legitimate, it has to be registered at the Ministry of Commerce (MoC) and hold a license from the Ministry of Economy and Finance. The license enables the rights for buying, selling, renting, evaluating and developing real estate properties. Only a company with this license is counted as a real estate company.
What I’m seeing now is that some companies are putting up a banner at the office, calling themselves companies, though they haven’t registered at the MoC yet. These kind of companies seem to have the intention to scam customers. It’s an issue. Still, there are those companies that claim they have already registered at the MoC with legal names as real estate companies, but when we check it at the Ministry of Economy and Finance, they haven’t even registered yet.
What are the risks with a real estate company not registering with the Ministry of Economy and Finance?
It’s very risky if a company is not registered at the MoC or at a relevant ministry. If there is an issue or they run away, people will judge all such real estate companies as being the same based on that one company. Some companies have built boreys without having acquired a license from the Ministry of Land Management, Urban Planning and Construction. If a potential buyer or investor wishes to know about which companies have registered they can check with the MoC and if people would like to know which boreys have been licensed they can ask the General Department of Industrial Economy of the Ministry of Economy and Finance. Additionally, people can also contact CVEA.
How should the Ministry of Economy and Finance intervene to reduce risk in the real estate sector?
I once proposed a new law to regulate all the selling and buying activities that would require compliant real estate companies to put a banner on their offices. The law would ensure proper regulation in the market and stop sellers from inflating prices. I am still yet to hear back from the ministry, however.
What is your opinion on the state of the real estate market at present?
Currently there are more sellers than buyers in the market. Pricing is becoming a problem because as sellers believe they can ask for any price they want, leaving the properties sitting unsold for almost a whole year sometimes. But now, buyers are the kings since there’s only about one buyer for every ten or so houses for sale. Therefore, the buyer has the upper hand in the market and has more choice.
What are the predicted market concerns for 2018?
We don’t believe land prices will increase and from this year onwards there won’t be any new, major real estate projects announced. What is happening now is that prices have reached their peak so now customers are struggling to buy because prices are so high. So there is a bit of a situation now where sellers can’t sell and buyers can’t buy.
What is the status of the real estate school CVEA was interested in opening?
This Friday, we will hold a meeting with the members of the association to discuss this school plan. We have to acquire a memorandum of understanding with a Malaysian real estate association. However the question remains about where we will acquire funding to open this real estate school.