Ahead of elections 10 years ago, people across the country would hoard rice in case the vote sent the country spiraling into a state of turmoil. Businesses across the country would bide their time before making any major investments. And those who could afford to would leave the country during the election period in case things took a turn for the worse.
But after 20 years of CPP rule, the levels of anxiety that once reverberated during election time have subsided. Across Phnom Penh, sizeable building projects are steadily rising from the ground and investors said Thursday they were unperturbed by the prospect of political change.
“This election is not like the past, where things were less certain. Now, people know already who will be the next government and they will continue on with their work,” said Chok Mealy, an adviser for Bonna Realty Group, one of the largest realtors in the country. “Investment in property [and land] just keeps increasing, from year to year.”
“Five years ago, we were not sure what will happen, there were many political things going on [and] during other elections, you would hear gun shooting and other things that affect people,” he said.
One measure of how buoyant people are can be seen in the price of land. According to figures provided by Bonna Realty, Phnom Penh land prices have increased by 25 percent in the six months preceding this year’s election.
It was not always the case. Traditionally, land transactions would grind to a halt ahead of an election, said Bretton Sciaroni, a partner at legal consultancy Sciaroni and Associates. During the last election in 2008, there was very little business due to the global financial crisis.
“By the time that the Royal Government was formed, Lehman Brothers had collapsed and the onset of the international financial crisis meant that the property speculation never got started again,” Mr. Sciaroni said. In 2009, Cambodia’s economy failed to grow and housing prices in some areas fell tenfold.
Fast-forward five years and land prices are back to pre-2008 levels, said Phalla Udom, a supervisor at Bonna Realty. He said that land in central areas such as Phnom Penh’s Boeng Keng Kang I commune currently sells for $3,300 per square meter, up from about $2,800 six months ago. “We don’t have problems with the political and economic situation…buyers and sellers keep trading their land although it’s election time,” Mr. Udom said.
A flurry of construction projects launched recently have also fueled land prices in the city’s outskirts, such as in Sen Sok and Pur Senchey districts, where prices have increase by 25 percent to $1,000 per square meter in the past six months.
In May, South Korea’s Booyoung Group broke ground on a $1.1 billion satellite city in Sen Sok district along Russian Boulevard, the second such development to break ground in Phnom Penh that month.
“I would say it hasn’t really affected the number of clients much, although some domestic clients have held off on investment until after the elections,” said Mark Williams, controller for CBRE in Cambodia.
“But they are still going to invest,” he said, adding that the only reason some projects had slowed down was because government officials were busy campaigning.
Sier Chhaylin, director of the local firm Visal Realty, said that he expected a surge in the price of land after the elections, although he refrained from making a prognosis.
“Land selling and buying will not slow down. On the contrary, it will just keep increasing” after the elections, Mr. Chhaylin said.
Mr. Udom at Bonna Realty said that he even expected property prices to surpass the pre-crisis prices of 2008. “After the election is finished, land prices will increase and will be higher than the price traded before 2008,” he said.