CVEA president analyses real estate
After suffering during the 2008-2009 global financial crisis, the Kingdom’s real estate sector has since shown strong growth.
Cambodian Valuers and Estate Agents Association (CVEA) president Chrek Soknim, who took office on January 1 this year, was interviewed on Sunday by The Post’s Hin Pisei about the state of the Kingdom’s real estate sector, his expectations for this year, as well as his plans for CVEA.
How has the real estate sector in Cambodia developed in recent years?
Political stability, economic growth and rising foreign direct investment, as well as support from the banking sector, have boosted the real estate sector in Cambodia every year over the last three to four years, and real estate prices have increased about 15 per cent annually on average.
Prices last year increased between 10 and 15 per cent compared to 2017. Land prices climbed around 20 per cent, while the price of houses and commercial buildings grew by around 10 per cent.
Currently, which locations are seeing the highest prices in Cambodia?
Phnom Penh’s Boeung Keng Kang I still has the highest prices, with land prices starting at more than $4,500 per sqm. Apart from the capital, the next locations with the highest prices are Preah Sihanouk, Siem Reap and Kampot provinces.
Which locations have experienced the fastest price spikes and why?
Preah Sihanouk province’s property prices have experienced the fastest growth in Cambodia over the last couple of years. In some places, prices more than doubled in a year.
The increase in land prices at the time was caused by such things as the expansion of the deep sea port, the increase in investment in Sihanoukville Special Economic Zone and an influx of Chinese tourists and investors that heightened the demand for land to construct hotels, casinos, restaurants, residences and entertainment districts.
Currently, the locations seeing the fastest rise in real estate prices after Preah Sihanouk province are Kampot province and Banteay Meanchey province’s Poipet town.
What do you think about the real estate market this year?
The real estate market this year will continue to be strong, especially on the outskirts of the capital and other coastal and border provinces. Real estate prices will increase 15 per cent on average.
As for Preah Sihanouk province, because last year saw a high rate, which was above the forecast, I think that the growth rate this year will steady. The trend of price increases will turn to the neighbouring provinces.
What do you think about the property market in Cambodia over the next five years?
I think that from now until 2023, Cambodia’s real estate sector will remain healthy. Looking at Cambodia’s political situation and economic growth, they are still going on strong. According to research, the real estate cycle normally progresses for a 30-year period before it faces a crisis and it has only been 11 years since the 2008 crisis, so the sector will not see any problems yet. I am still optimistic about the market beyond 2023.
How has the use of services from licensed real estate companies and professionals for buying and selling properties progressed?
I notice that the use of services from licensed real estate companies or professionals in Cambodia is still limited because most of them are active in urban areas where there is a lot of buying and selling. We want everyone to understand the benefits of buying and selling property through a licensed professional or company. Transactions and property rentals that do not go through a specialised company tend to see a lot of problems.
As CVEA president, what kind of strategies do you have to help keep the real estate market strong in Cambodia?
CVEA currently has 90 member companies. I have a lot of plans to jointly promote the real estate sector image in Cambodia with the government, including giving advice and solving members’ issues, communicating with experts in the association and conducting more training in the real estate sector.
This interview has been edited for length and clarity.
Cambodian Valuers and Estate Agents Association (CVEA) president Chrek Soknim talks about the Kingdom’s real estate sector.