Logo of Phnom Penh Post newspaper Phnom Penh Post - Spending down as land sales fall

Spending down as land sales fall

Spending down as land sales fall

real_1.jpg
real_1.jpg

Businesses feeling crunch as fewer land sales mean fewer new rich with money to burn

Photo by: Heng chivoan

Mel Trea's spending days are temporarily over.

THE end of Cambodia's property boom is increasingly being being felt across the economy as a downturn in land sales means fewer newly-rich Cambodians hit the capital with money to spend.

Sam An, 43, who runs a private automobile dealership on Phnom Penh's Monivong Boulevard, said his sales have declined by up to 50 percent over the last six months from a peak during the building boom of 2006, 2007 and the early part of 2008.

"Many of our buyers made a lot of money from selling land and came to buy cars here," he said. "Now they are so quiet."

Sok Narin, 28, said he used to make a handsome profit from selling Suzuki motorbikes from his private dealership in 7 Makara  district to people arriving from the provinces with cash in hand.

"At this time last year I sold between four and five motorbikes per day, but now my business is very quiet," he said. "I think that this is because the property market is not good."

Cambodia's sole Toyota distributor, TTHK Co Ltd, told the Post last month that it has sold only 1,200 vehicles this year, well short of the 2,000 previously anticipated, after sales plummeted almost 50 percent since May.

RM Asia Co Ltd, the country's second-largest automobile importer, said sales of Ford vehicles have declined about 10 percent within the last few months.

Va Teang, 35, who owns a gold shop at Pochentong Market in Phnom Penh, said her income has dropped 50 percent because of the real estate market slowdown.

Mel Trea, 72, a farmer-turned-land speculator from Prakar village in the outskirts of Phnom Penh, said the land boom had made him rich over the past five years.

"I never thought that I would have a great chance like this," he said.

"I earned a lot of money from land I sold during 2006 and 2007 when the land was fetching very high prices. If I had bought land for $1,000 per hectare I sold it at $10,000 per hectare; if I bought at $10,000 I sold at $100,000."  

With the proceeds, he built a villa for his family and bought cars and motorcycles. With few buyers around, his wealth is locked up in his remaining land bank and his spending money has dried up.

"Now, the property market is very quiet," he said. "It's not like the last few years when I was very busy speculating."

Kang Chandararot, president of the Cambodia Institute of Development Study, said it was inevitable that the slowdown in real estate sales would be felt throughout the economy.

"The world economic crisis has already affected the real estate market in Cambodia," he said. "If the real estate market collapses, it can make life difficult for other people doing businesses in Cambodia, especially car and motorbike sellers."

Ngy Tayi, undersecretary of state at the Ministry of Economy and Finance said the government was considering how it could intervene to boost the sector.

"I can't give you an answer as to what we will do, but I can say the government is discussing the issue and considering helping them in the near future," he said. 

MOST VIEWED

  • PM to vet NY holiday dates

    The Ministry of Economy and Finance submitted a letter to Prime Minister Hun Sen asking him to formally set a five-day national holiday from August 17-21 to make up for the Khmer New Year holiday in April that was postponed. Finance minister Aun Pornmoniroth sent

  • Cambodia rejects UN rights claim

    Cambodia's Permanent Mission to the UN Office in Geneva on Friday hit back at David Kaye, the UN special rapporteur on the Promotion and Protection of the Right to Freedom of Opinion and Expression after he raised concerns over the repression of free speech and

  • Snaring may spawn diseases

    The World Wildlife Fund (WWF) has warned that snaring of animals has become a crisis that poses a serious risk to wildlife in Southeast Asia and could spawn the transmission of zoonotic diseases to humans. Its July 9 report entitled Silence of the Snares: Southeast Asia’

  • Ex-party leader, gov’t critic named as secretary of state

    A former political party leader known for being critical of the government has been appointed secretary of state at the Ministry of Rural Development, a royal decree dated July 9 said. Sourn Serey Ratha, the former president of the Khmer Power Party (KPP), told The Post

  • Residence cards set for over 80,000 immigrants

    The Ministry of Interior plans to grant residence cards to more than 80,000 immigrants to better keep track of them. The ministry announced the plan on July 10, following the results of an immigration census. “An inter-ministerial committee and many operational working groups have been set up

  • Kingdom produces PPE gear

    Medical supplies from Cambodia have been donated to member countries of the Asian Development Bank (ADB) to assist in the fight against Covid-19, said an ADB report published on July 9. The report stated that the supplies were donated as a response to global efforts to

  • Kingdom, US vow stronger ties

    At an academic forum on Saturday to celebrate 70 years of Cambodia-US diplomatic ties, Cambodian researchers and officials expressed hope of encouraging US investments and for that country to deepen and improve its bilateral relations. Held at the Royal Academy of Cambodia, it reviewed the past 70

  • Fifteen Cambodians from Saudi get Covid-19

    The Ministry of Health on Sunday confirmed 15 more imported cases of Covid. The 15 men ‒ all Cambodian aged 21 to 33 ‒ arrived from Saudi Arabia on Friday via a connecting flight in Malaysia. They were travelling with 79 other passengers, three of them women. The ministry said 80 of the

  • Ministry requests school opening

    The Ministry of Education, Youth and Sport on Thursday said it would request a decision from Prime Minister Hun Sen to allow a small number of schools to reopen next month. Ministry spokesman Ros Soveacha said if the request is granted, higher-standard schools will reopen

  • Kingdom eyes India FTA, China deal set for August

    Cambodia is studying the possibility of establishing a bilateral free trade agreement (FTA) with India to open a new market with the second-largest regional economy. This comes as an FTA with China is scheduled to be signed next month while similar negotiations with South Korea