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Phnom Penh property investment rising
Strong economic growth and political stability are driving more people to invest in land in Cambodia, especially in Phnom Penh, because it is seen as low risk.
Land values in the Phnom Penh area growing at between 10 to 15 per cent annually, while in the suburbs they are rising by some 10 per cent.
Land buying has revived a lot, especially in Phnom Penh and its outskirts, because investors see the land price rising, while in the provinces is still “difficult”, Kim Heang, president of Khmer Real Estate said.
“Such investments will have much profit, but investors should be careful; if they have $10 and they buy up to $50 they will have high risks, but if they have $100 and they buy $90 and leave $10 that will be OK,” he said. “However, if they have no money, and they go to the bank for loans to invest in this sector, they will face high risks.”
What is strange in that during the previous elections buying, selling and land prices were stagnant, but for this forthcoming election buying and selling not only has jumped but prices have skyrocketed, Dith Channa, the general manager of VMC Real Estate Cambodia said.
Dith Channa said five reasons making the buying, selling and land prices in the city jump include the country’s strong country economic growth; its political and social stability; foreign investment; the investors believe the country’s politics are mature, and the belief the real estate sector can provide more profit.
“Investment decisions for this time is right and real estate experts believe so; concurrently the integration of ASEAN is coming closer. When Cambodia is economically integrated into ASEAN, it will have more and more investors come to invest in the country. When investors come, they all have demand for properties, therefore, the price of real estate will rise,” Dith Channa he said.
According to Channa’s predictions, between 2012 and 2013, the land price in Phnom Penh has increased 15 to 20 per cent and for the good locations in the outskirts it has jumped between 30 per cent or higher. In 2014 this growth will be similar to this year but 2015 it will climb even higher.
“Currently, land investment may have risks, but not as high as 2008-2009 because the increase this time is due to real demand, while the investors who buy properties buy not only for profit but also for specific purposes. If they wait two or three more years, it can be too late, because this time the supply and demand has balance,” Dith Channa said.
The buying and selling of land in Phnom Penh has really jumped, and the purchase of land for sales for profit is good, Kuy Vat, president & CEO of Vtrust Group said.
“It is a good time for investment, but we have to check the main locations; although we know that any location is profitable but some can be profitable in the far future. If we are able to buy in the middle of the city, it is very, very good because we will have higher profits,” he said.
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