Logo of Phnom Penh Post newspaper Phnom Penh Post - Real estate growth to slow in next five years, IMF predicts

Real estate growth to slow in next five years, IMF predicts

Content image - Phnom Penh Post
The International Monetary Fund has predicted that growth in the Kingdom’s real estate sector will slow in the next five years. Hin Pisei

Real estate growth to slow in next five years, IMF predicts

The International Monetary Fund (IMF) has predicted that growth in the Kingdom’s real estate sector will slow in the next five years.

And while insiders say the sector is saturated, government officials seem to disagree with the IMF’s forecast.

The IMF’s Cambodian Economic Growth Report released on Tuesday predicted that the country ‘s economic growth will continue to remain robust for another few years, before falling to about six per cent in the medium term due to subdued productivity growth, credit maturity and real estate cycles.

“Currently, the real estate and construction sectors are strong drivers of economic growth, but five years [from now], other sectors will [drive] growth [more] than [real estate and construction],” IMF representative Jarkko Turunen said.

CPL Cambodia Properties Ltd chairman and CEO Cheng Kheng who runs the oldest real estate firm in Cambodia said the sector will remain strong for the next five years.

“The real estate and construction sectors in Cambodia currently have strong momentum in just three to four provinces for the next five to six years, I think that they will continue to pick up in other provinces with potential. The real estate sector in Cambodia will continue to grow for a long time,” Kheng said.

Cambodia Constructors Association secretary Chiv Sivpheng said large construction projects take three to five years to complete, so the IMF’s forecast could come true amid the completion of some of them.

“Upon completion of [a project], investors do not make new investments immediately, waiting until the project is sold out so that even if the investment falls short for a time, it will recover afterwards,” he said.

But Sivpheng said the construction sector is now on the rise without signs of slowing.

Emerging Markets Consulting senior advisor Nget Chou said the market will be saturated in five years due to the rapid surge in large construction projects.

However, he said Cambodia’s real estate sector will continue on the upswing thanks to the influx of Chinese investors.

“The real estate sector in Cambodia for the next five years may decline somewhat, but if the Chinese continue to come and invest, it will be as good as always,” he said.

Reports from the Ministry of Land Management, Urban Planning and Construction showed investment capital in the construction sector for the first half of this year was some $2.15 billion only, whereas it was over $6.4 billion over the same period last year and $5.26 billion in 2016.

Ministry spokesman Seng Loth said he did not know what the IMF’s forecast was based on, but judging by the momentum of the construction sector, he still believed it will continue to grow even stronger.

“We cannot say that growth in real estate and construction in Cambodia will reach maturity in the next five to six years because developing countries obviously need constant construction,” he said.

MOST VIEWED

  • Kem Sokha’s daughters slam ‘liar’ Sam Rainsy over ‘smears’

    The daughters of former opposition leader Kem Sokha hit out at Sam Rainsy on Tuesday, accusing the newly nominated “acting president” of the Cambodia National Rescue Party (CNRP) of leading a “smear campaign” against their father and “repeatedly lying to the public”. The Supreme Court-dissolved

  • US Embassy urges reconciliation

    The US has urged Cambodia to restore the independence of the media, drop charges against Kem Sokha and other political prisoners, and end the prohibition of political activity by opposition parties. However, senior government officials see the request, issued by US embassy spokesman Arend C

  • Phnom Penh authorities ban march for Human Rights Day

    Phnom Penh authorities have banned a planned march as local NGOs and workers’ unions gear up to celebrate the 70th anniversary of the signing of the Universal Declaration of Human Rights on Monday, with a youth group leader saying they would march nonetheless. The UN

  • Government deports 235 Chinese scammers

    THE Immigration Department of the Ministry of Interior on Thursday deported 235 Chinese nationals, 35 of whom were female, via the Phnom Penh International Airport for their part in a Voice over Internet Protocol (VoIP) online money extortion scam. The deportees were arrested on November 26 over the