Cambodian Real Estate News

[kvaaa]

Real estate boost predicted

Friday, 18 June 2010 15:01 Catherine James and Soeun Say .
Analysts say property law sub-decree would boost foreign investment potential

Photo by: Sovan Philong
Construction work on apartments on Sisowath Quay, Phnom Penh, continues Wednesday.

Developers have welcomed a government move towards allowing foreign property ownership in private units to be up to 80 percent of a building, with stakeholders applauding it as a sign that Cambodia is opening up to more investment.

The government is considering a sub-decree on the foreign property ownership law to clarify the percentage of a building that can be privately owned by a foreigner, the Land Ministry said Wednesday. Previously the law had no limit, and it was not clear what the allowances were.

Reactions among key players in the property market and investment experts, interviewed by the Post on Thursday, were largely positive. Many predicted that the sub-decree would boost Cambodia’s market potential; however, some are uncertain of the time frame for change.

Douglas Clayton, chief executive officer of fund manager Leopard Capital, which has a US$1.5 million investment in residential housing in Siem
Reap, said the sub-decree would be a positive indication the government was opening to foreign direct investment.

“This will obviously be very favourable news if they pass this sub-decree,” he said.

Although he did not expect immediate results, at least not in cities such as Phnom Penh and Siem Reap, he pointed to Cambodia’s coastline as an area of potential growth.

“I’m not sure it would immediately stimulate the foreign property market – at the moment there’s not as much interest because of the global financial crisis,” he said.

“I think what we’ll see is the demand for property along the coast will increase. Foreigners tend to want to have a place more for the holidays, so I think that’s where you’ll see more developers targeting.”

Matthew Rendall, partner at law firm Sciaroni & Associates, said there is definitely a market for foreign ownership – “we get enquiries about that all the time” – but that just how big the market is, or could become, isn’t clear.

He said that demand from developers would probably increase as their sales scope went from being concentrated in Cambodia to global in nature.

“The higher the government makes the level of foreign ownership, the better it is for the property market generally because it increases the customer base,” he said.

Daniel Parkes, country manager for Cambodia at global property firm CB Richard Ellis, agreed. He said an 80 percent limit would help expand the market, opening it up to new foreign investment, which he deemed “very important” to the sector.

However, he said that only “time would tell” how it would affect the property market in terms of levels of both construction and development.
“This doesn’t give all the answers, but it is a good step along the way,” he added.

Commentators, however, said that some points remained to be clarified in the sub-decree to prevent a “dual economy” within a single apartment block.

“The idea 100 percent cannot be sold to foreigners will be a factor developers take into consideration when they design these apartments. If x amount can be sold to Cambodian’s only and the rest to foreigners, it would potentially create two different pricing structures,” Rendall said.

He said details of whether the 80 percent refers to the number of units or floor space could also have similar design ramifications.

But he played down fears that a broader customer base could inflate housing prices to the detriment of local Cambodians, saying there will always be a market for different levels of income.

Among property developers, the reaction was overwhelmingly positive.

Un Mouy, sales and marketing manager for Tow Town Co, a Taiwanese developer behind Bali Resort housing development project, said it has already seen a jump in demand from foreigners following the foreign property law’s introduction earlier this year and expects the sub-decree to drive demand.

“It is good news for us to build more apartments and condominiums to sell,” she said.

She said the company is preparing documents to ask permission for the Ministry of Land Management to build another apartment to meet client demand.

Kheng Ser, assistant to South Korean developer World City’s vice president, said the move would attract more investors as property opportunities opened up.

“I think it’s a good idea to allow up to 80 percent of units to be owned by foreigners,” he said. He added that his company had also sold the vast majority of condos at its $2 billion development in Camko City.

Foreigners “will come more and more to invest and live in our country because they can own property here,” he added.

According to the Ministry of Land Management, the sub-decree is awaiting approval from the Council of Ministers and is set to be passed within
the next month. ADDITIONAL REPORTING BY ELLIE DYER

[SeeMacau]

I support this idea - greater choice and more varieties for the foreigners to invest in Cambodia !!

[kvaaa]

Believe it or not, lots of foreigners DO want to live in Cambodia. It would be great to have a condo at the coast of Sihanoukville. The temperature is not as bad there.

[yangkhm]

Foreigners may think about Bangkok first than they may think about Hai Noi is the second and Phnom Penh latest choice for them.

[SeeMacau]

Phnom Penh can rank above Bangkok and Hanoi, in terms of high yield return property investments. Property market was doing exceptionally well before the financial crisis due to strong demand from investors and locals - a good indicator to prove the property market in Phnom Penh is attractive and healthy. I believe the market is now picking up again with all the all the new projects and constructions.

Another good news is the loosen control of foreign property ownership law approved recently, this will definitely boost Cambodia’s market potential !!

In Phnom Penh, you had a great variety of investment choice - any new developments from high-end apartments (Golden Tower 42, De Castle Royal Condo) to middle/middle-low end apartments (Bali Resort & Apartment), all can be bought by locals or investors either with big or small budgets

[kvaaa]

Lets hope that the IFC construction will restart soon.

[Asian]

Originally Posted by kvaaa

Believe it or not, lots of foreigners DO want to live in Cambodia. It would be great to have a condo at the coast of Sihanoukville. The temperature is not as bad there.

That is where I am going to retire. Maybe, I should be thinking of buying a condo there. Do they have anything up yet? How about the airport?

[SeeMacau]

You can buy an apartment unit in the city center with your incomes and personal savings from Canada.

Airport is too far away !!

[kvaaa]

deleted

[SeeMacau]

Property tax launch is set for launch in 2010

Tuesday, 29 June 2010 15:01
Soeun Say

Buyers of constructions worth more than $25,000 are set to pay new levy if Ministry schedule goes ahead as planned

THE government is set to launch a new property tax by the end of this year, officials at the Ministry of Economy and Finance said Monday, in a move which has reportedly sparked protest in Cambodia’s capital.

Under the Finance for Management Law, passed in November, purchasers of constructions worth more than 100 million riels (around US$25,000) will be required to pay an annual tax worth 0.1 percent of property value.

“We are preparing a prakas to establish a committee to evaluate property and we will start implementing tax collection in the end of this year, as the National Assembly requires,” Norng Piseth, chief of the Real Estate Division at the Ministry of Economy and Finance, said Monday.

“It is very important for increasing national income,” he added.

Although the new levy is not expected to raise large amounts of additional funds, as Minister of Finance Keat Chhon has estimated tax revenue would be between $3 million and $9 million, the government has voiced its ambition to improve tax administration.

Hang Chuon Naron, secretary of state for the Finance Ministry, said at a meeting of government donors held earlier this month that in 2010 the government aims to improve customs and tax administration, to meet the increased expenditure of sub-national administration and introduce a tax on all land assets.

This view was reiterated by Keat Chhon at a discussion of real estate law late last year.

“We want to establish a tax culture which allows us to collect tax directly in the future,” he said.

About 180,000 houses that are under municipal and provincial administration would be covered under the new property tax, he added.

Some commentators are considering whether it is the right time for a new levy.

Sung Bonna, president and CEO of Bonna Realty Group and president of National Valuers’ Association of Cambodia, said Monday: “In my point of view, I think that government [is acting] too early to collect tax on property while country is facing the [impact of the] global economic crisis.”

He believes that local investment may be affected “a little bit” by the fee, but it is the “duty for everyone to comply”.

But property developers, who are set to pass on the tax to vendors, did not oppose the move.

Kheng Ser, assistant to World City’s Duk Kon Kim, the developer behind Camko City project development, said Monday: “I think that those who are obliged to pay tax are buyers.

“But if the law required to pay – we must to pay to the government. This is a duty.”

However, according to the Deum Ampil News, 100 people representing 490 families living at the Borey Tang Kasang housing development in Phnom Penh’s Dangkor district protested against the tax on Friday. The report said that developer Borey Tang Kasang confirmed to protesters that they must pay the tax.

[Asian]

Originally Posted by SeeMacau

You can buy an apartment unit in the city center with your incomes and personal savings from Canada.

Airport is too far away !!

I'll sure do, thanks.

[camtv03]

I think it's right time for the cambodian government to collecting properties taxes from investors and the people. .01% is really really small compared place where i live right now.

[KlaKhmer]

I think even the law comes too soon, it will be ok.

[SeeMacau]

0.1% is fair, but please don't impose a large increase of tax in the future so Cambodia can attracts more foreign investments, and bring up more skyscrapers !!

[KlaKhmer]

Originally Posted by SeeMacau

0.1% is fair, but please don't impose a large increase of tax in the future so Cambodia can attracts more foreign investments, and bring up more skyscrapers !!

if your condo or house cost 100.000 $, you must pay 100$/year.
So, it depend for a person who works in Cambodia, 100$ is it important for them ?

100euro/year is important for me

[SeeMacau]

Bad to investors holding up a number of properties.

From what I know, many investors in Phnom Penh hold up more than one apartment units in their investment portfolio. Once the building completed and before their units are being transfer to someone else, they are liable to pay for the maintenance fees (quite expensive) and the annual property tax.

[kvaaa]

Cambodia’s construction approvals soar .

Thursday, 28 July 2011 15:00 Soeun Say ..




Workers balance on scaffolding at the site of the US$70 million Rose City Condominiums yesterday in Phnom Penh. Photo by: MENG KIMLONG
CONSTRUCTION approvals granted by government authorities have increased 93 percent in the first six months of the year, compared to the same period last year, figures show.

Some 1,079 potential projects worth US$637.7 million were given the go-ahead in the January to June period, compared with 1,094 construction projects worth $329.1 million approved last year, according to Ministry of Land Management, Urban Planning and Construction figures obtained on Tuesday.

The ministry’s Construction Department Director Lao Tip Seiha said that the ministry had approved a number of larger construction projects such as housing developments, apartments, factories, and tourist facilities in the first six months.

“The number of construction projects approved in the first half was less than the previous year, but we’re seeing lots of larger construction approvals for projects with bigger values,” he said.

The approvals are expected to lead to more construction projects in the second half of the year, said Lao Tip Seiha.

“The sector has been boosted in the first half of the year,” he said. “Some construction sites are worried about looking for workers, because they’re fleeing back home to work on rice farming.”
Labour force inconsistencies can be amended by more awareness and availability of vocational training, said insiders.

“An increase in the availability of international-standard vocational training, similar to qualifications provided by City & Guilds, in the Kingdom would benefit the sector’s labour force,” said Sterling Project Management Chief Executive Officer Gary Sterling.

With the subsidence of the economic crisis and the optimistic outlook of the property sector, other experts believe it to is the right time to resume construction of stalled housing developments.

“It’s time for them to restart construction after three years’ of being affected by the world crisis,” Bonna Realty Group President Sung Bonna said. “We see that some developers are preparing to start work, while others have begun their projects,”

Ministry of Land Management, Urban Planning and Construction data revealed that 2,149 construction projects worth $840 million were given the green light in 2010, compared to 2,230 projects worth a combined $1.988 billion in 2009. ADDITIONAL REPORTING BY LIAM BARNES

Source: PP Post

[mrfusion]

Originally Posted by SeeMacau

Bad to investors holding up a number of properties.

From what I know, many investors in Phnom Penh hold up more than one apartment units in their investment portfolio. Once the building completed and before their units are being transfer to someone else, they are liable to pay for the maintenance fees (quite expensive) and the annual property tax.

Maintenance fees is not very expensive when the building is new, especially if it can generate some rental return. I think PP in general gets reasonably good rental return compare to more developed countries.

Property Tax and Land Tax could be expensive.

[mrfusion]

Originally Posted by KlaKhmer

if your condo or house cost 100.000 $, you must pay 100$/year.
So, it depend for a person who works in Cambodia, 100$ is it important for them ?

100euro/year is important for me

Any amount is important. But you need to assess if it is worth it.

Like the growth of the condo/house, the rental, etc. a $100,000 depends on location, might bring you $800+ rents a month.

[SeeMacau]

Originally Posted by mrfusion

Maintenance fees is not very expensive when the building is new, especially if it can generate some rental return. I think PP in general gets reasonably good rental return compare to more developed countries.

Property Tax and Land Tax could be expensive.

Yes, rental is very expensive here, even higher than Bangkok.