Foreign demand may be slow to take off
Four foreign nationals have bought properties in Phnom Penh under the recently adopted foreign ownership law through a real estate agent in the capital, though analysts said it could be some time before purchases made by foreigners noticeably move the market.
Soush Saroeun, executive director of Asia Real Property, said his company had sold four small apartments for between $30,000 and $40,000 in Phnom Penh’s Chamkar Mon and Tuol Kok districts since the Council of Ministers adopted a sub-decree on July 9 allowing foreigners to own up to 70 percent of condominium buildings.
“We have sold four apartments in Phnom Penh,” Mr Saroeun said, adding that interest in the purchases was generated from advertisements on his company’s website.
Mr Saroeun said that the buyers were from Russia, Australia, Canada and Ecuador though he did not disclose their identities for reasons of confidentiality.
Mr Saroeun also said his company was currently finalizing the purchase of another apartment at the De Castle Royal apartment block in Chamkar Mon district worth more than $100,000. Officials at De Castle Royal were not immediately available yesterday.
Despite early signs that the foreign ownership law is generating interest among foreign buyers, analysts said it would take more time before transactions really begin to ignite.
“At this moment there is no clear sign that these properties are selling like hot cakes,” said Tan Hong Kiat, country manager for the global realtor Knight Frank, adding that the property market still needed another six months before demand for property from foreigners could be determined.
Since the law has been adopted, Mr Kiat said that “a few” European property investors have contacted him expressing interest in apartments located in central areas of Phnom Penh.
Prime Minister Hun Sen on Monday showcased the newly adopted foreign ownership law to investors during an official visit to Singapore.
But property developers building large scale projects such as CamKo City and Grand Phnom Penh International City on the capital’s periphery said it could take some time before the real estate sector reaps any benefit from the foreign ownership law.
Mr Tan of Knight Frank said the extent at which foreigners buy property inside such developments would largely depend on the price of the apartments once they are on the market.
Sung Bonna, CEO of Bonna Realty Group, said that since the adoption of the foreign ownership law in April almost 20 to 30 percent of queries coming from clients have been from foreigners.
But there is a stark learning curve for those looking to buy as many remain unfamiliar with the law, he said, adding that he is yet to sell any property to a foreign national.
“Other countries are one step ahead of us,” he said. “When I go abroad I take the chance to tell people about the law. I think more people will be buying next year.”
The law on foreign ownership allows non-Cambodians to own property above the ground floor in co-owned buildings, as long as the building does not fall within 30 km of the country’s land borders.
Foreigners will, however, be allowed to own property inside such areas if the property is located on the industrial estates within special economic zones.