The after-effects of last year’s economic recession have left just 38 officially registered real estate agents operating in Cambodia, down from a previous total of 88 at the peak of the property market in early 2008, according to data received yesterday form the National Valuers Association of Cambodia.
The data show that real estate agents started to close in the second half of 2008 and have continued to dwindle ever since.
“A vital factor in forcing these companies to shut down is because of financial problems” in the property market, said Keuk Narin, secretary for NVAC, adding that prior to 2008 there had been plenty of transactions in the property market keeping businesses afloat.
“We have seen more construction but nothing in the way of transactions,” said Youk Chamroeunrith, general manager at Forte Insurance, whose company helps clients to insure their property upon purchase.
Doubts over the future of the property market still has real estate agents worried about their ability to remain profitable.
Sier Chhay Lim, director at Visal Realty in Phnom Penh, which started operations in 2004, said that in 2009 he had only just managed to break even. He hopes to manage the same feat this year.
“Currently there is no more transactions,” he said. “I cannot predict when this sector will get better because now businessmen turn to other sectors.”
At Time Property Company, also in the capital, officials are changing their strategy just in order to survive.
“I am concentrating on training real estate agents in order to generate new income,” said Siev Sohpal, managing director at the company. “I have to change my strategy in order to find additional financing.”
But not all business is lost in the sector. Kim Heang, general director of Khmer Real Estate, said that despite laying off a third of his work force during the course of last year’s financial turmoil, sales have increased by 35 percent in the first six months of the year.
“I can sell more houses worth between $60,000 and $100,000 this year,” he said, adding that similar transactions were nearly impossible in 2009.
According to an NVAC report released this month, prices for both residential and commercial property have remained stable between the first and second quarters of this year, a sign that the market has at last bottomed out.
Residential property prices in Phnom Penh during the second quarter of this year were down 45 percent at an average $1,500 per square meter compared to the first quarter of 2008 when prices in the market peaked.
Commercial property prices in the second quarter were also down 47 percent at $2,600 per square meter compared to nearly $5,000 per square meter in the first quarter of 2008.