Wednesday, October 21, 2009

Unusual high price of property in Cambodia

It should be not usual that property prices in Phnom Penh increased in some cases by as much as 1,000 percent from 2005 to July 2008-when the market crashed-with the most expensive and on the capital's riverfront rising about $5,000 per square meter, a more than 900 percent increase from $550 per square meter in 2005, according to statistics from Bonna Realty.

Why is it happened? The simple answer is that many sellers/buyers, banks and real estate agents just want to make quick cash gained from this dangerous business. And since many transactions have been made, it ends up with high price of property; cash is tied up in lands and no more buyers…

Still there are many lands or houses asking for sale but no buyers. Many estate agents in Phnom Penh have published their nice report for sale properties but not a fair one, sometimes, just normal villa house worth more than $1 million etc…How they measure those value of properties, is it real? Phnom Penh is still far behind New York, Paris, Bangkok or Singapore in term of infrastructure development.

Many banks tried to hide their % NPL stated as low as possible. Do not forget that recently, their loan books have also increased significantly and unusually. Surely, a large part of it has been involved in estate speculation by Cambodian’s borrowers.

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8 comments:

Anonymous said...

Who wrote this and what make us think everything he wrote is right and correct? I would like to see everyone write respectably and with facts and findings carefully... because we don't need speculation and all that inflating messages.

Anonymous said...

I think he has the right to speculate. To be honest I think the price is quite high and much of scam or sham. There were shacks and yes I'm talking about houses that had a pricing of $650,000. Let's be realistic here. Do you think a house that is a shack would cost that much? If the writer is a real estate agent. I will most definitely buy from him or her because he or she seems to be an honest person. I like that. Do you expect a person who makes $1 a day to buy a house that costs $600,000 or pay rent of $2,000. The house pricing is equivalent to that of the states. Cambodia is still behind and is poor. This is cheating the people of Cambodia and even foreigners. Those real estate sites are scams scams scams!

Anonymous said...

The boom in real estate has turned to bust. If you have the cash, then you can take 50 percent off the asking price.

Anonymous said...

It is just a personal reflection on the current property market...just reminding to those property speculators in Cambodia...It is dangerous. In Cambodia, I can say the property price is not real if comparing its economy today,growth, GDP per capita etc. And here no one can be able to produce a good report on this sector, it is just very basic...i.e. no system/method to calculate a fair price of property.

Anonymous said...

I think too a person has the right to speculate. I think most of realestates in Cambodia put up a price higher than its cost. This maybe due to Cambodia is a bargan market or maybe the agent in the realestates would like to have high extra cash profitable from that money, or with the other reasons or with the combinantion of all. Beside, showing the price and the size of the land the realestate home page should provide and exact location of the place too buy accessible from gooleearth or google map. This way will help foreigners as well as rich local people to buy the properties.

I agree that the infrastructure in Cambodia is far poorer than New York, Paris, Bangkok or Singapore. When I were in France 15 years ago, I felt that France is like haven heaven while Cambodia is not much different from a hell. 10 years ago I were in were in Thailand I found that Thailand were better infrastructure than Cambodia but cannot compare for heaven and hell like France/Cambodia 15 years ago. I step on a dog poop in one Saturday. 8 years ago some rail roads started in Montpellier for its town structure. How was the land price there and before? Thailand starting for its sky train at the first time at that time. I stucked 3hr buy a non-air con bus while accrossed Bangkok and I got sick when returned my place. Taxi drivers alway want to go longer round rather than the short cut if we do not know the road. How was the land price there and before? 2 years ago I was in Singapore when it MRT yellow line was not available yet but just started last year and a short part was put for operation this year. The estate prices were much more expensive for buying as well as the renting. It was even crazy to find a place you wanted to rent. The estate now is still not like its two years ago yet. Look at Singapore, a small country with 4.6 million people and most of them are business man. Though Singapore infrastructure is quite good and much better than Cambodia, it is still poorer than Japan when I were 7 years ago. It is good to be in Japan as a tourist and shoping but not for work I think. The service is perfect there. However, who know when the typhoon and earthquake will take away all your properties? How is the land price in Japan? I think not much has changed since it has change long time ago before I were 6 years ago. Estate properties seem to be more stable after the whole infrastructure are there. Look at Vietnam a neighbour of Cambodia. Its realestate section was not so different from Cambodia thought price was slighly higher in 20 years ago. Its realestate boosted strongly at 1997 when Hongkong became China, and many companies have moved Vietnam after US widraw economic depression from Vietnam. How much her realestate was and how about today? No need to say about economic downturn since every things have been down since that and the most effective maybe the realestate and tourist section

Maybe only a few villas that cost 500000-1mil. Not all the Cambodia earn 1 dolar a day. Some Cambodians also working abroad (do not count the workers but high skill people) like lots of Vietnameses have done some years ago. People where they live they never forget where they was born and sure they affect the country economic. I guest one who has the money for 500000-1mil is not a stupid one. Thefore there must be the fact behind the thing that make s/he dicide to do so. The fact is that though the economic downturn is continueing the land price is not back to its 2005 yet. If the world is not collapse or and Cambodia has no war, it is

Anonymous said...

(CONTONUE from previous message) sure that the estates price there will be more and more expensive. Things seem just started there only. Only very few places with some square metters of land is indicating its high price like the writer wrote 5000 dollars/m2 while the riverside oposite to the palace royal was below than 300 dollars/m2. Present day due to economic down turn I think you can get at 50-200 dollars/m2. It is a good time to catch the opportunities but not to blem the old time. I think one should go to the place where they want to buy and as the seller dirrectly so that you can get the fair price. Just to remember that thing just started and a small buble bust but another big buble will come and you will lose some chances if you keep complaining but not to chance the opportunities.

Anonymous said...

Part of the reason for the property bubble is there's lot of money flying around, some are dirty money, some are money earned from corruption. Then buying property is a way to clean the money. But remember, even if the bubble has burst, the price won't go down much as those that own those properties won't need money from the properties. they have other sources. I'm talking about these big people in power whose money never dries up despite living in this poor pathetic Cambodia. And you guess what percentage of properties owned by these people - it's their business. That's why property taxes never go anywhere cuz they make the law.

Anonymous said...

Part of the reason for the property bubble is there's lot of money flying around, some are dirty money, some are money earned from corruption. Then buying property is a way to clean the money. But remember, even if the bubble has burst, the price won't go down much as those that own those properties won't need money from the properties. they have other sources. I'm talking about these big people in power whose money never dries up despite living in this poor pathetic Cambodia. And you guess what percentage of properties owned by these people - it's their business. That's why property taxes never go anywhere cuz they make the law.

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