But rival realtor says there is no evidence land prices have fallen in
the capital, with owners holding on to property for better times ahead
The president of the National Valuers Association of Cambodia claims property prices in Phnom Penh have fallen by between 10 and 20 percent from a historic peak in June.
"The main factors were the global financial crisis, the Cambodia-Thailand border standoff and loan restrictions on commercial banks set out by the government," Sung Bonna said.
He added it was impossible to predict if prices would fall further, saying it would depend on the length and depth of the global financial crisis and the introduction of government housing sector reforms.
Sung Bonna, who is also president of Bonna Realty Group, the largest real estate agency in Cambodia, has called on the government to ease restrictions on foreigners owning apartments to give the real estate sector a boost.
The Ministry of Land Management, Urban Planning and Construction is pushing through a law change after some agents and developers reported sales declines of up to 50 percent this year, Prime Location reported last week.
But Jean-Benoit Lasselin, business development manager at Cambodia Properties Limited, said there was no evidence prices were falling.
"Even with the crisis there is a big need for land in Phnom Penh. There is no crash in land values because there are so many people who want land downtown," he said.
Lasselin conceded that sellers were having trouble finding buyers, but said they were in no hurry to reduce prices in order to offload property.
The market would stagnate at worst, he said. "The price is going to stay stable but there is no fear it is going down."
Keith Oi, country head for property consultancy Knight Frank Cambodia, warned that property values had to be taken with a grain of salt in Cambodia because there was no official body to record and publicise property transactions.
He has called on the Ministry of Finance to establish a department of land valuation in the name of transparency.
Bubble has burst
Property values in the capital have soared in recent years on the back of a large inflow of foreign funds for development projects.
According to Bonna Realty Group figures, property prices in Phnom Penh rose somewhere between 50 percent and 80 percent in 2007 and between 80 percent and 100 percent in the first half of this year.
Prices reached as high as US$5,000 per square metre by June in some prime central city locations.
The boom market came to an end as the country prepared to go to the polls in July, but realtors at the time predicted the election would serve only as a small blip on the long-term pattern of rising Cambodian property prices.
That was before the border dispute with Thailand and the onset of the global financial crisis. It is becoming increasingly clear the boom is over.