Phnom Penh has experienced a tremendous growth in land value from July 2007 to July 2008. Capital gains was 140 percent which put Cambodia onto the international investing map.
Residential property was valued at $2,300 per square meter recently. This is a phenomenal rise from the $750 in the first half of 2007.
The country’s first ever skyscraper “The Gold Tower 42″ is being built right now. The 42-story residential building is testimony to the new found wealth that has hit the shores of Cambodia, a once forgotten paradise.
The Proposed Camko City Currently Under Construction
Having struggled to free itself from the shackles of past horrors, the infamous Khmer Rouge’s genocidal rule, Cambodia is set to establish itself as another boom country.
Having lacked a single traffic light only ten years ago, in Phom Penh much has happened since then. Where once visitors trod amongst shanty towns, today they return to find new shopping malls, modern residential buildings, offices and villas.
Other areas of Cambodia are also attracting developers who want to cash in on the imminent boom.
Phnom Penh Temple [lecercle via flickr]
To counteract a possible fraud scenario from developers, the Cambodian government is introducing a brand new law that requires developers to make upfront deposits with the Cambodian National Bank before the start of construction.
This law is supposed to protect investors from being stung by fraudulent deals.
Despite the great growth in Cambodia over the last 12 months, this year has seen some slowdown of activities. This has mainly attributed to high inflation, high construction costs and high interest rates. However, according to a local banking source, this situation could be sustained by the country’s property sector, depending on the length of the global crisis and the amount of monies invested.
Much of the new found growth has been attributed to Korean developers. Although the idea of skyscrapers and marketing property might be new to most Cambodians and despite the hype, some remain skeptical, like Sung Bonna, head of Bonna Realty.
He said “residential skyscrapers are a new concept in a country that not too long ago was still giving away property, not trying to market a 40th-floor condo for $1.6 million. I feel it’s a little bit early for that.They said it’s going to be a success. But I don’t know. If it doesn’t happen, it is not good for us.”
Another factor to consider is the fact that foreign investors are not allowed to own Cambodian property outright. Apparently though, there are ways to circumnavigate this law quite legally and if you plan on spending big bucks, you might be even made citizen.
Perhaps the nasty side of it all is the evictions of those home owners who don’t have clear land titles. All in the name of the game.
Here are some images of the Phnom Penh International Finance Centre which is currently under construction (courtesy SkyScraperCity)