A report on land prices in Phnom Penh that claims to be the first of its kind has canvassed a large number of correspondents to comprehensively gauge property values in the city’s various districts and communes.
Released on March 3, Land Price 2014, which was produced by VTRUST Property, is the result of a survey of 660 correspondents in Phnom Penh’s nine districts and 96 communes.
Chit Uys Stevexo, CEO of VTRUST Appraisal, said that the findings of the study should be helpful for property evaluators in appraising land prices clearly and transparently.
The survey found the average price of land in Phnom Penh to be $1,140 per square metre, with wide fluctuations depending on the precise location. The lowest per-square-metre price for land was just $10 in parts of economically undeveloped Sen Sok district. Unsurprisingly, fashionable BKK1 commanded the highest prices, reaching as high as $5,900 per square metre.
Chrek Soknim, dispute director of VTRUST Property, said there had been a revival of land sales in recent months, as investor confidence overcame political uncertainties.
The land surveyed in the report was largely residential, accounting for 64 per cent of the total, with the remainder either commercial or in industrial zones or developing areas. The majority of the land surveyed was already built on, with vacant lots accounting for 38 per cent of the total.
The report also notes that land prices in Phnom Penh did not decrease in 2010, unlike many other cities in the world where property bubbles burst.
While the report reaches no solid conclusions about the trajectory of land prices in the Kingdom’s capital, it notes that land prices have consistently nudged north over the past few years, despite a speculative bubble between 2008 and 2010 that resulted in over-supply.
Meanwhile, the report found a substantial discrepancy in prices between fashionable downtown areas and what it refers to as “sub-street areas”, where per-square-metre prices averaged $940.
According to VTRUST Property, it collected its information by sending research teams of 10 out into the field, and the majority of the information collected was via person-to-person interviews or telephone calls. Real estate agents accounted for only 10 per cent of the information collected.
Soknim said he expected prices to continue to increase for the foreseeable future.
“I expect land prices will increase around 10 to 15 per cent this year and that property transactions will also increase by around 25 to 30 per cent,” he said. In 2015, I think that the situation will improve even more with ASEAN Economic Integration, which should lead to an increased flow of investors coming to Cambodia, pushing land prices up by 20 to 25 per cent.”