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Despite Deadlock, Real Estate, Construction Continue Growth

Construction workers work on a new building in Phnom Penh. Cambodia is embracing a thriving real estate market, where land and housing prices in the capital city skyrocket with no sign of letting up, file photo.
Cambodia’s construction and real estate sectors continue to grow, despite a six-month political deadlock, analysts say. In the period just after the election, growth slowed slightly, but it has rebounded in subsequent months.

Cambodia has seen continued economic growth in construction and an continued uptick in real estate prices in recent years, pushing economic growth but also leading to ongoing land disputes between rural and urban poor and developers.

“It was only slightly affected,” said Po Eavkong, managing director of Asia Real Estate Cambodia, told VOA Khmer. “In just three months, we’ve seen activities in construction projects, and land prices remain unchanged.”

In 2013, commercial land expanded by as much as 20 percent in some areas. Residential land increased about 10 percent, and industrial land about 5 percent. And though prices vary, commercial real estate in the most expensive areas of Phnom Penh runs between $3,000 to $6,000 per square meter.

Residential properties are going for as high as $3,500 per square meter in the capital, an extremely high number, compared to land far outside the city, which can be found for as low as $50 per square meter.

Land values are not only increasing in Phnom Penh, however. In Battambang, Preah Sihanouk, and Siem Reap provinces, real estate values are increasing, along with construction projects for hotels and resorts.

Construction and real estate saw much Asian investment in 2013, according to government statistics. China remains a leader, through agricultural concessions, high-rise investment and industrial projects. South Korea, Japan, Malaysia and Singapore are all investors.

“Most of China’s projects are in land concessions,” Po Eavkong said. China is given more concessions of projects than other countries, he added.

In Sitha, managing director of VTrust Real Estate, said the company’s most recent survey, of nine districts in Phnom Penh, showed continued growth of real estate and construction in Phnom Penh, despite the political deadlock.

Cambodians are by now used to post-election impasses, he said. And many believe the latest one will be resolved soon.

“Cambodia always has the same problem, since 1993,” he said. Cambodia holds many opportunities for foreign investors, especially compared to nearby Thailand, Malaysia, or Singapore, he said.

Noun Rithy, general manager of the Bunna Reality Group, said the post-election woes had a slight impact on real estate and construction, but these sectors are growing in spite of it. Some investment did stop following the elections, and the opposition’s boycott of government. But in the months that followed, investment projects continued.

Government figures show an increase in real estate and construction of 31 percent in 2013, the election year, compared to the year before.

“There’s a political deadlock, but that hasn’t resulted in any serious effects, as in Thailand,” said Kong Chandararoth, an independent economist. “Investors still have faith that solutions will be found.”