Friday, July 21, 2017

Surfing Cambodia's property boom

published 22 April 2016

If Southeast Asia’s internet economy were a tree, property sites would be the lowest-hanging fruit. Going online to find a flat or house, instead of laboriously poring through the weekend classified sections of a newspaper, is standard practice in cities like Singapore, where today’s leading portal Property Guru was founded in 2007. In Phnom Penh, however, what software developer Matt Howlett discovered on a 2014 business trip was that even the lowest-hanging fruit can still take a while to fall.
Looking for an apartment to buy and frustrated over roaming the streets of the Cambodian capital looking for sale signs, Howlett ended up launching pteah.com, a property-listing website. “Pteah” is the Khmer word for “home.”
In Cambodia, Howlett didn’t even have a proper classified section to plunder for listings. Howlett had to gather a small team to go out, look for sale and lease signs, and call the numbers indicated to obtain more information about the properties.
Pteah.com is now abandoned and Howlett is into other pursuits, but a vibrant property industry in Cambodia has fueled the growth of similar local and global property sites such as realestate.com.kh, khmerrealestate.com. angkorrealestate.com, phnompenhrealestate.net and global consultants knightfrank.com.kh and cbre.com.kh. Appealing to the country’s 14 million local and expatriate internet users, prospective tenants or buyers only have to specify the type of property, price range, and number of beds or rooms needed, or look at the advertised sites as though flipping through a catalog. The sites also offer an assessment of property and help in securing loans and mortgages.
Surfing the Internet was how development worker Aimeelyn Velicaria-Gabriel found a home for herself, her husband, and their two sons in the Cambodian capital when she was first assigned there in 2013 by the NGO she worked for. She went online, found a listing site, and obtained the contact details of an agent with whose help she found the place where she and her family continue to reside.
The recent boom in Cambodian property originated in economic misfortune. Like many other countries, Cambodia was hit hard by the global economic slump of 2008. The recession caused land prices to plummet as much as 40 percent, according to the travelers’ blog justlanded.com.
In response, the government passed a law in 2010 that allowed expatriates to own apartments and condominiums, even as they still were not allowed to own land (and properties on the ground floor) because this was prohibited by the country's constitution. Work-arounds for the prohibition include long-term, renewable leases and ownership of property through local companies as long as the majority of the company's shares is owned by Cambodian citizens. The result was a threefold increase in the volume of property transactions, driving the property market up and up.
In recent years, the luxury segment of real estate has soared. Justlanded.com estimates that the ownership share of foreigners in the high-end sector is as high as 70 percent, with mostly Chinese and South Korean investors, in addition to a growing group of Europeans and North Americans. Travel blogger Andrew Henderson, who styles himself The Nomad Capitalist, also says the boom in Cambodia, which is now spawning high-end restaurants, villa-style boutiques and clone coffee shops “hinges on Chinese buyers.”
Property consultant Knight Frank Asia-Pacific research head Nicholas Holt says easing construction costs and rising residential prices and office prices have caused the Cambodia property market to exceed the performance of real-estate markets in Bangkok, Ho Chi Minh, Jakarta, and Guangzhou, China.
“Sometimes I think it’s insane,” said Gabriel.

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