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Real Estate Market Showing Signs of Recovery

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.
PHNOM PENH - Land prices in Cambodia continued to recover in the last half of 2012, especially in urban areas, following a collapse of the market in 2008, real estate investors say.

Prices continue to rise the most in Phnom Penh, with rentals leading the way and low interest rates offered for home buyers, but investments in tourism outside the city have also helped raise land values.

Keuk Narin, vice president of Asia Real Estate Cambodia, told VOA Khmer that commercial land prices along Phnom Penh’s main boulevards, Monivong and Norodom, have gone from $3,000 to $4,000 per square meter and in some cases as high as $5,000 per square meter.

In the last half of 2012, the number of business transactions in real estate increased, and prices rose about 13 percent for residential areas and 16 percent for commercial areas, he said.

Apartments are currently the top-selling real estate, and condominiums are highly sought after for rent by South Korean clientele, he said. The stable growth of the sector has helped improve the housing market, too, he said, by allowing the banks to offer loans at low interest rates.

Noun Rithy, managing director for the Bonna Realty Group, said construction is on the rise in commercial buildings, factories, hotels and houses, raising land prices. That includes sites in the provinces of Battambang, Preah Sihanouk and Siem Reap, where tourism investment is high.

“The movement of buying and selling real estate in those provinces has increased,” he said. “We could see more investors from Japan investing money to build hotels or condos.”

Construction has emerged in recent years as a major economic driver for Cambodia, adding to the garment, tourism and agriculture sectors.

The Ministry of Land Management approved some 1,600 construction projects in 2012, worth $2 billion, an increase of nearly 70 percent over the year before.

Beng Hong Socheat Khemro, a spokesman for the ministry, said the increase was due to political stability, “a good legal framework,” the economic recovery and the growth of the tourism sector.