Provinces missing out on property boom

Provinces missing out on property boom

7 Angkor temple

Although the real estate sector in Phnom Penh is thriving, with current trends increasing values and plenty of buying and selling, this has not been seen much in the provinces.

Buying and selling properties in the provinces has increased little, while prices in Phnom Penh have increased between 5 to 10 per cent and could jump to 15 per cent for the area in the middle of the city, Dith Channa, general manager of VMC Real Estate Cambodia said.

The value of land in towns such as Sihanoukville, Siem Reap and Battambang, is around $800 to $1,300 per square metre, while on the outskirts it is from $100 to $150.

In Phnom Penh, values in the Central Business District are around $3,500 to $4,500.

“Property values in the provinces do not have strong growth, due to less demand from investors, because most people are interested only in the area near Phnom Penh because there are a lot of people, business activities and good road infrastructure. If we look at the provinces, investors often face many challenges, such as infrastructure, water and electricity, etc,” he said.

Provinces on the coast, such as Sihanouk and Kep have a lot of buying and selling activity because many foreigners invest in hotels, guesthouses and bungalows along the seafront, Channa said.

However property in Sihanouk and Siem Reap have not increased much compared to 2012, while the land value in the two provinces have increased less than 10 percent, Chrek Soknim, Deputy director of VTrust property Co said.

The demand for land in Siem Reap is mostly for hotels, guesthouses and warehouses, while in Sihanouk most of it is for hotels and guesthouses, he said.

“Most of the buying and selling activities are only in the city, while on the outskirts there is not much activity, limiting the development in those provinces. Those provinces attract tourists, but only for big events, and this flow is not able to attract large investors to invest in the area,” he said.

Land values in the above two provinces ranges from $100 to $500 per square metre, he said.

Cheng Kheng, director of the CPL real estate company and president of the Cambodian Valuers and Estate Agents Association said he did not agree, saying the buying and selling of land in the provinces with economic potential, especially in Sihanouk, has increased much compared to the previous year, because there are more and more foreign investors, and residential construction activity is also growing in Sihanouk, Siem Reap, Battambang and other provinces with economic potential.

The demand for real estate and its price will also spread to rural areas because many large companies from abroad are looking for land to plant rubber trees and invest on other agricultural production, he said, adding that previously rubber plantations could be bought from $7,000 to $8,000 per hectare, but now the price has increased from $15,000 to $20,000 or higher, depending on the age of the small rubber trees or whether they are close to harvest, he said.

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