The areas where land prices in Phnom Penh have increased most sharply over the past six months are the districts of Daun Penh and 7Makara, according to a report from Asia Real Estate Cambodia.
The data shows that the price of land in Daun Penh district and 7Makara during the first six months of this year rose 19.7 per cent compared with the corresponding period in 2011.
And the price of land in Chamkarmorn district – an area in some demand – increased only 5.3 per cent, while Tuol Kork rose 12.7 per cent.
Keuk Narin, vice-president of Asia Real Estate Cambodia, said the price growth had begun in 2011 as the world economic crisis started to fade.
“The economic sector started getting on better while the banking sector reduced loan interest rates, pushing real estate gradually upwards with those buying property having specific targets,” he said.
The report revealed that land in Daun Penh district for business in the first six months of the year saw an average price of US$ 3,365 per square metre, with residential at $2,042 per square metre, compared to the same period last year, when business areas averaged $2,832 per square metre and residential areas only $1,692.
7Makara district’s business areas in the first quarter averaged $3,000 per square metre, and with residential at $1,681 compared to the corresponding period last year, when business land cost $2,597 and residential $1,357.
In Chamkarmorn, business areas in the first quarter was at $2,685 and residential $1,362 In Tuol Kork, areas for business in the first quarter of the year averaged $2,140 with residential areas at $948 for same period last year the figures were $1,827 and $874 respectively .
Keuk Narin said the real estate market by the end of the year was not expected to increase more than last year - it may be at only 6 per cent.
He said real-estate investors had more knowledge about changing from residential property to business.
Previously, they had invested in villas only, but now they had begun investing in apartments rather than selling or renting them.
“One villa is rented from $3,000 to $4,000 a month, but if you build an apartment, not in the same area, and the land size is the same, you can earn from $40,000 to $50,000 a month,” Narin said. He added that demand for apartments has increased more than the available supply, from 5 per cent to 10 per cent.
Sung Bonna, president of Bonna Realty Group and chairman of the Cambodia Valuers and Estate Agents Association, said that in Phnom Penh, the real purchase price for the first quarter had increased 10 per cent compared with the equivalent period last year.
He said land in Daun Penh district was filled with investment in buildings, but the district had some good locations.
“Daun Penh and Chamkarmon are good for a similar potential investment; actually, Boeng Keng Kang I residential area is in demand more than other areas in Phnom Penh,” he said.
He added that land in Chamkarmon district had a 50 per cent potential, with Daun Penh at 70 per cent, while 7Makara is a multi-market area, but trading was limited.
To contact the reporter on this story: Seun Son at [email protected]