Phnom Penh land values down 20pc, valuers head says

Phnom Penh land values down 20pc, valuers head says

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.

Claim disputed

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.

MOST VIEWED

  • Diplomatic passports issued to foreigners to be annulled

    The Ministry of Foreign Affairs and International Cooperation will move to annul diplomatic passports issued to those not born in Cambodia. Analysts say the move may be in relation to reports that former Thai prime minister Yingluck Shinawatra used a Cambodian passport to register as

  • Hun Sen warns Irish MP of EBA ‘mistake’

    Prime Minister Hun Sen on Saturday told former Irish premier Enda Kenny, still a member of the EU nation’s parliament, that the 28-nation bloc should not make a “third mistake” regarding Cambodia by using the preferential Everything But Arms (EBA) agreement to “take 16 million

  • The hairy little heroes saving many lives in rural Cambodia

    IN RURAL Siem Reap province, rats dare to tread where no person will, as these hairy little heroes place their lives on the line each day for the good of the local community. The rodents are the most important members of a special team, leading

  • PM warns EU and opposition on 34th anniversary of his rule

    HUN Sen reached the milestone of 34 years as Cambodian prime minister on Monday and used the groundbreaking ceremony for a new ring road around Phnom Penh to tell the international community that putting sanctions on the Kingdom meant killing the opposition. “Please don’t forget