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Real Estate Prices Continue to Fall

Property prices in Cambodia's once-booming real estate market haven fallen by as much as 20 percent since June, a real estate expert said Monday.

The global financial crisis, the Thai-Cambodia border standoff and loan restrictions set out by commercial banks were all contributing to a fall in prices, said Sung Bonna, president of the National Valuers Association of Cambodia.

"The drop may continue for a long or short time," he said in opening remarks at a real estate investment training course in Phnom Penh. "It is up to the reform of the Cambodian situation. Some crises will be solved."

Between June and October, values in property fell between 10 percent and 20 percent, he said.

"When the decline is going on and on, we are very concerned about the real estate price in Cambodia," he said. "But we hope it will recover soon."

Cambodia in recent years has experienced a boom in property prices, leading many rural and urban residents to sell off their land at very high prices, raising rents and values, and boosting the construction sector.

But the property bubble was now of concern, especially considering the bust of the US housing market, which has led to a global financial crisis, said Finance Minister Keat Chhon.

"The real estate market in Cambodia is also indirectly affected by this world crisis," he said. "Starting from this bad experience facing the world, Cambodia is paying her critical caution in the process of the developing real estate sector in Cambodia."

The falling property prices are expected to stunt Cambodia's economic growth, he said, acknowledging that both the economic crisis and the border standoff, which has continued since mid-July, were factors in the drop.

Neither were in the hands of Cambodia to fix, he said.

"Cambodia is a political hostage to Thailand's internal conflict," he said, referring to a mass movement of opposition supporters who are calling for a change of government in Bangkok.