Tuesday, May 20, 2008

Property sales slowdown recently in Cambodia

According to Phnom Penh Post's related article dated on May 16-29, 2008: "Property sales hit a bump as elections nears".

Cambodia’s red hot property market has cooled significantly as investors fretting over the outcome of July national elections curb a buying spree that has seen land prices more than quadruple in some parts of the country, realtors and lawmakers say.

“In general, businesspeople involved in real estate are waiting to see what the situation is after the national election”, Bonna told the Post, adding that without buyers, property sellers have been forced to cap prices. “Also the rainy season isn’t a good time to go out and see land”, he added.

Realtors, however, including Bonna, predict the elections would register as only a small blip on the long-term pattern of rising Cambodian property prices.

“I think real estate will remain a tool that helps the country develop”, said Cheng Kheng, owner of Cambodia Properties Limited (CPL), adding that he expected prices to resume climbing a few months after the polls, once concerns over restructuring subside.

According to Kheng, many of the bigger spenders in Cambodia’s real estate sector have political party affiliations that were demanding more of their time as the election approached.

“I think people who have a lot of money to buy are busy campaigning for the election.”

But the real estate sector slowdown has also hurt an unprecedented building boom that was a key factor behind Cambodia’s recent double-digit economic growth.


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5 comments:

Anonymous said...

The market is taking a breather, prices have even fallen somewhat except in Phnom Penh. That is a good and healthy sign. The question is when and how those price increases will resume or whether the market will correct itself as it is clearly overheated. There are certain basic parameters to gauge whether prices are inflated or realistic, one of which is the earning potential of the land, another one is the willingness of private buyers to shell out enormous amounts of money for land they want to occupy themselves. For instance if land in Sihanoukville is sold at $100 plus per sqm, and the location is just in the middle of nowhere, as is happening, than one can see that some of those prices are just fantasy. But some buyers are pretty unsophisticated and believe the marketing pitch of the sellers and therefore fuel that unhealthy price explosion. The other factor will be the slackening demand for all those Cambodian flats being built left and right. There just aren't that many buyers out there. It will lead to an eventual melt-down. No doubt.

Anonymous said...

No doubt about a present situation, more sellers and more wants but less demand(most land seekers are not capable of affording the soaring price unless a bank jumps to offer a hand).

Quick buck generated from buying and selling land has resulted in an increased number of speculors who sit on land expecting windfall.

when price of land rises up , it is hard to fall down. This is not really a good bode for Cambodian development...however it is good for land holders to make money and run!!!!!!!!

Anonymous said...

Who (Cambodian, Korean, or Chinese, Barang...) is making the money and run?

Recently, we have seen that there are lots of korean & barang real estate developpers investing in Cambodia and lots of millions $$$ flow in also. It could be possible driver of rising up the property price. As result, many Cambodian from farmer, middle class to high ranking offial become richer and millionair respectively. That's is good. But is it for short term or long term for the sustainable development of Cambodian economy since there are more and more land speculators than good investors who are thinking on more productive businesses.

Now even the property sales are slow down but its prices maintain at high level and no one from land speculators think to drop the price unless the government do take an appropriate action to control real estate situation.

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