With residential villas and apartments fetching record sales and rental prices in the most exclusive parts of town increasing, Phnom Penh has become a hot market for real estate investors.
“In the previous six month the residential market has boomed,” said Sung Bonna, director of the estate agency Bonna Realty Group.
The stable political situation in Cambodia has led to a sudden demand from foreign and local investors and sent prices up, he said.
“Local [investors] used to keep their money under the bed, but they don’t anymore,” he added.
A draft report compiled by Bonna Realty Group shows that the price of land in some of Phnom Penh’s most expensive neighborhoods has gone from $300 per square meter last year to as much as $550 this year.
In Boeng Keng Kang 1, Chaktomuk and Boeng Reang—three Phnom Penh communes known for their exclusive villas—the price per square meter ranges from $350 to $550, Sung Bonna said.
According to the report, an average 17-by-30-meter residential lot in Boeng Keng Kang 1, priced about $180,000 last year, now costs $250,000 to $300,000.
But quiet and well-guarded villas on paved streets are not the only types of residences considered attractive in Phnom Penh.
Sen Chan Rietry, executive director of Cambodia Estate Agent, said that the increasing demand for apartments in the center of Phnom Penh has pushed the price of apartments on the riverfront and on sought-after streets such as Monivong and Norodom boulevards to a new height.
In 2003, his agency was involved in the sale of three 4-story apartment buildings each priced at $170,000.
“This year, we were looking for similar property for some investors, but we couldn’t find the same kind of buildings even for $250,000,” he said. “There are so many properties in Cambodia and rich people can make so much money.”
Some 15,000 apartments have been sold in the center of the city since the beginning of 2003, Sen Chan Rietry said.
According to Tim Smyth, managing director of Indochina Research, the price of land and property in Phnom Penh’s has gone up because “the demand is outstripping supply” and because a large amount of property is concentrated in the hands of a small number of people.
“A lot of real estate is owned by a few people, so they can ask for prices you wouldn’t see in a free market,” he said.
Lim Heng, the owner of a villa in Boeng Keng Kang 1, said that she never imagined the value of her property would increase the way it has, but she thanked aid agencies, NGOs and the country’s elite for her good fortune.
“There are a lot of NGO offices in the commune, and foreigners want to stay near the office and each other,” she said of the area’s exclusive tenants.
High-ranking officials and foreigners also prefer to live in the pricey neighborhood because it is “safer and quieter than other places in the city,” Lim Heng said.
(Additional reporting by Chhim Sopheark)