The passage of a new law for the ownership of property by foreigners could give a boost the stagnant real estate market as well as bring in more investment, industry experts say.
The much-anticipated Foreign Ownership Property law was passed by the National Assembly last week and must now move through the Senate before being signed by the king.
“This foreign property law will benefit both foreign investors and Cambodians and will increase confidence in the legal framework for foreign property ownership in Cambodia,” Daniel Parkes, Cambodia country manager for CBRE Richard Ellis, told VOA Khmer.
Parkes called the law “a revolution in property investment” and one more step for Cambodia toward becoming a destination for international investors and property developers. “It goes a long way toward improving confidence and improving investment in Cambodia,” he said.
The law, which was drafted in December in a bid to improve ownership rights, allows foreigners to own residential property such as apartments, so long as they are above the ground floor.
Parkes said investors should consider coming in now, to take advantage of an expected upswing in the economy in 2011.
“The next six months is a good time to buy,” he said. “Comparatively, it’s more appealing than Thailand and Vietnam for foreign investors.”
Cambodian law does not allow foreigners to own land. Previously, if a foreign wanted to own any property, he would have to seek out a Cambodian partner, which deterred investment.
“My wife is Cambodian; she owns her own home here,” said Paul Luchtenburg, chief executive officer for Angkor Mikroheranhvatho Kampuchea, a microfinance institution. “But I know a lot of friends who want to find an easier, legal way to buy an apartment in Cambodia.”
With more foreigners able to buy apartments, the demand will increase, which could bring higher prices to property investors, he said.
“It should bring more money into the country,” he said. “So I think that is a very good thing.”
Jeremy Ha, director of Phnom Penh Commercial Bank, said South Korean developers and construction companies were optimistic about the new law.
“So I guess the number of companies [who want to] build apartments or condominiums will steadily increase in the future,” he said. “I am also optimistic as a foreigner, because I can buy an apartment or a villa in my own name.”
Sung Bonna, president of the National Valuers Association, told VOA Khmer in an interview the law will boost the economy.
Overall economic growth in Cambodia ground to a halt in Cambodia during the global economic downturn. The real estate market, which had been experiencing a boom, suffered heavily.
“It’s an opportunity for foreign investors to buy their own houses in Cambodia, for investment and for residence,” he said.
The sub-decrees that implement the law should be easily because the law is clear, he added.
Im Chhun Lim, Minister of Land Management, said the implementation of the law “will be fair and proper for all sides.”