Foreigners entering the condo market in Phnom Penh

Foreigners entering the condo market in Phnom Penh

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HAMPTONS Apartments in Phnom Penh BKK area. Photograph: Sreng Meng Srun/Phnom Penh Post

The number of foreign owners of houses in Cambodia has soared in recent years after the government permitted foreigners to have rights over owning real estate in the Kingdom, according to officials of the Ministry of Land Management, Urban Planning and Construction.

Speaking at the opening of the Cambuild 2012 exhibition at Koh Pich two weeks ago, Phoeung Sophorn, secretary of the Ministry of Land Management, said the number of foreigners who have purchased housing is likely to increase further, because Cambodia has allowed co-ownership rights for purchasing homes.

The figures show that 286 foreigners bought homes in the first eight months of 2012, equal to 670 housing units. Business in the building sector is increasing because of the government, which has granted concessions for new building through encouraging the building of high buildings within specific areas.

“To construct high buildings will not only move Phnom Penh towards becoming a more modern city, but will also urge positive movement for real estate development and building in the future,” Phoeung Sophorn said.

Chairman of Bonna Realty Group, Sung Bonna said that the number of foreigners who have invested in Cambodia has increased more in 2012 then in 2011, observing that foreign owners of real estate such as condo buildings has climbed 40 per cent, compared to 20 per cent last year.

“The data of the Ministry of Land Management, Urban Planning and Construction is the official channel for registering condo purchases, but some foreigners have bought houses using Khmer names, so we cannot manage the data absolutely,” he said.

Keuk Narin, vice president of Asia Real Estate Cambodia, said the growth in the number of foreigners purchasing condos in Cambodia is not due to potential profit, due to the high prices of condos, and the high interest rates on bank loans of around 10 per cent.

His company’s research in the first quarter of this year, shows that 3,193 condo units were sold, with 80 per cent run by foreigners and 20 per cent by local investors.

Among all condos, Grade A is 33 per cent sold out at $1,739 dollars per square metre, Grade B is 49 per cent sold at $1,014, and Grade C is 18 per cent sold at $770.

“The condo does not seem to have great potential in Cambodia because of the high price and low potential income,” Narin said.

To contact the reporter on this story: Siv Meng at [email protected]

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