Monday, December 17, 2007

Cambodia: Real Estate bubble risks

The real estate boom in Cambodia presents some risks for short-term economic growth, and macroeconomic stability. It may strongly affect the nascent banking sector if no preventive measure is taken. About 37 percent of apartments sold in Phnom Penh are for speculation purpose, according to a recent EIC survey.
Like in Cambodia, real estate activities in Vietnam are booming and mostly speculative. But the Vietnamese government will impose progressive taxes on housing speculation to help deflate an impending bubble in the real estate market.
The more real estate a person possesses, the more tax will be paid. New regulations will also require all housing project developers to publicize sufficient information for customers to avoid being duped by speculators engaging in arbitrage, i.e.,taking advantage of consumers'lack of information on expected price changes.
The key factor motivating speculationn in Vietnam remains quick profits caused by lax government regulations, according to a recent report of Vietnam's Ministry of Construction. Will the Cambodian government do the same as Vietnam? Obviously not in 2008, if we refer to the draft budget law for 2008.


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1 comment:

interspace uk said...

thanks for the share this informative and interesting article with us
property dealer

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