The Chinese apartments: the market is saturated

Cambodge Soir

22-09-2008

The real-estate agencies and investors will meet on Tuesday 23 September at the Ministry of Economy in order to assess the situation and supervise the sector.

The housing availability in Phnom Penh is likely to be higher than the demand, believe several observers of the sector, forecasting a burst of the real-estate bubble.

“The real-estate sector is in danger of collapsing if the crisis continues further, particularly regarding the Chinese apartments”, believes Sung Bunna, director of the largest agency of Phnom Penh, Bunna Realty.

According to the director of Visal Realty, the purchasing price per square meter is allegedly even decreasing in some neighbourhoods of the capital city: if the market doesn’t take off within a year, it’ll result in a crisis”, he says, emphasising that the current slowdown could be the consequence of the election period, traditionally bad for business.

However, other professionals of the real-estate sector think that the commotion observed during these last months is due to a speculation which isn’t linked to the market reality: “The land prices increased because well-off people bought several houses with the intention to sell them again”, indicated a real-estate broker.

Two other factors explain the recent increase: the foreign investments in the real-estate sector and the economical development.

It is estimated that between 8,000 and 10,000 apartments are built each year in Phnom Penh.

The expected meeting on Tuesday 23 September at the Ministry of Economy will allow the professionals to prepare themselves for the coming market changes and to supervise the sector: out of approximately one hundred real-estate agencies in Phnom Penh, only about twenty have the required license.