By Elaine Moore in Phnom Penh
Financial Times
Cambodia is hoping to court international investment by relaxing laws on property ownership by foreigners in a bid to counter property prices that have fallen as much as 40 per cent in the wake of the global recession.
Cambodia’s draft law – which echoes an Indonesian move this week to review foreign ownership rules to draw investors to its property market – is currently under discussion at the National Assembly and would allow non-nationals to fully own residential apartments on the first floor and above for the first time.
The first-floor rule, which is also likely to be part of the Indonesian review, skirts sensitive political and legal issues.
The topic of land and property ownership is particularly sensitive in Cambodia where all land deeds were destroyed by the communist Khmer Rouge regime in the 1970s. Proprietary disputes are frequent as a result.
While resorts such as Phuket and Bali remain the most popular destinations for foreigners looking to purchase a holiday home in south-east Asia, Cambodia’s lawmakers hope that deregulation will lead to increased foreign investment in the country and help to pick the Cambodian property market out of the doldrums.
Unrestricted ownership of property by foreigners is uncommon in south-east Asia. In Thailand foreigners are permitted to own a condominium as long as the total foreign ownership of the building does not exceed 49 per cent.
However, investors interested in property in countries such as Laos and Vietnam can only purchase leases. In Cambodia, foreigners can either lease property or they can choose to set up a purchasing landholding company with a national citizen in which they have a minority shareholding.
But with property prices under pressure across Asia, a number of countries have begun to consider liberalising property laws to encourage greater overseas interest.
In November 2009, Vietnam clarified its foreign investment laws, which allow non-residents to lease apartments for up to 50 years.
Edwin Vanderbruggen, director of tax advisory group DFDL Mekong, said the changes to Cambodia’s property law would make it an attractive prospect in the region.
Daniel Parkes, Cambodian manager of property advisors CB Richard Ellis, which recently opened its first Cambodian office, said that new developments along the pristine beaches of Cambodia’s so-called Indochina Riviera, including islands such as Koh Rong, could be among the beneficiaries of the law change.
The country experienced a real estate boom between 2006 and 2008, when prices in some areas of the capital city, Phnom Penh, rose tenfold. The subsequent recession pushed prices down by up to 40 per cent and the situation has now stabilised, according to Mr Sung Bonna, chief executive of Bonna Realty Group, the largest estate agent in Cambodia.
Residential property in Phnom Penh’s French colonial centre costs on average $1,600 per square metre, while prime locations fetch around $2,700 per square metre.
Cambodia’s draft law – which echoes an Indonesian move this week to review foreign ownership rules to draw investors to its property market – is currently under discussion at the National Assembly and would allow non-nationals to fully own residential apartments on the first floor and above for the first time.
The first-floor rule, which is also likely to be part of the Indonesian review, skirts sensitive political and legal issues.
The topic of land and property ownership is particularly sensitive in Cambodia where all land deeds were destroyed by the communist Khmer Rouge regime in the 1970s. Proprietary disputes are frequent as a result.
While resorts such as Phuket and Bali remain the most popular destinations for foreigners looking to purchase a holiday home in south-east Asia, Cambodia’s lawmakers hope that deregulation will lead to increased foreign investment in the country and help to pick the Cambodian property market out of the doldrums.
Unrestricted ownership of property by foreigners is uncommon in south-east Asia. In Thailand foreigners are permitted to own a condominium as long as the total foreign ownership of the building does not exceed 49 per cent.
However, investors interested in property in countries such as Laos and Vietnam can only purchase leases. In Cambodia, foreigners can either lease property or they can choose to set up a purchasing landholding company with a national citizen in which they have a minority shareholding.
But with property prices under pressure across Asia, a number of countries have begun to consider liberalising property laws to encourage greater overseas interest.
In November 2009, Vietnam clarified its foreign investment laws, which allow non-residents to lease apartments for up to 50 years.
Edwin Vanderbruggen, director of tax advisory group DFDL Mekong, said the changes to Cambodia’s property law would make it an attractive prospect in the region.
Daniel Parkes, Cambodian manager of property advisors CB Richard Ellis, which recently opened its first Cambodian office, said that new developments along the pristine beaches of Cambodia’s so-called Indochina Riviera, including islands such as Koh Rong, could be among the beneficiaries of the law change.
The country experienced a real estate boom between 2006 and 2008, when prices in some areas of the capital city, Phnom Penh, rose tenfold. The subsequent recession pushed prices down by up to 40 per cent and the situation has now stabilised, according to Mr Sung Bonna, chief executive of Bonna Realty Group, the largest estate agent in Cambodia.
Residential property in Phnom Penh’s French colonial centre costs on average $1,600 per square metre, while prime locations fetch around $2,700 per square metre.
10 comments:
i think it is good idea that leadership discuss or debate about this very important decision because of course you have to lure good, long-term investors to the country. srp and company only argue one sided on the people who have no land titled as KR destroyed that when they were in power. i bet you some people who claimed it's their land is no more than displayed individuals looking for lucrative pie in the real estate incentives or perks. i mean, gov't have our priority set. who say you can't chew and walk at the same time? only srp and company have narrow view as they want everything to change or happen overnight. the problem is srp and company have no patient, they have to learn to have patience for a change; that's their problem, really! i think gov't can do many tasks and make decisons in many ways at the same time without disrupting other important issue, really! maybe srp and company don't have their concept of multi-tasking as they seemed to think in absolute terms only. that is so outdated to say the least, you know! wake up already, people!
Both anti-corruption Law and foreign property ownership law won't benefit anyone, but the corrupt ring. The former protects the law breakers, the latter encourages more corruption from within. As a matter of fact the more foreign investments flood in, the poorer Cambodia will be. The corrupt officials live in luxury while Cambodia in poverty. To save Cambodia from poverty, we have to root up the crimes of bribery and corruption within all ministries.
also, don't forget digital khmer has a huge potential to grow into a bill gates of cambodia. please look into improving digital khmer in the whole country. you'll be surprise. also, the construction business is hot, very hot in cambodia. also preserving colonial era architecture is hot too, there. there are a lot development potential in cambodia. may god bless cambodia and all khmer people and citizens. amen.
Keep dreaming! $2700/meter?
Keep selling folks!
It is bunch of riboff.
$2oo/m in Australia gives you road ,electricity,sewrage,gas to front yard.
This must be golden peace of land where so many officers own them by force, and the poors continue poorer. Majority earns $80 to $100 per month,commonly $50 per month.
This is not add up.
It is only scam for those vultures.
Very sad for other cambodians.
Keep your theatre' acts!
Are ther still fools out ther1 Or they just make a fool out of themself!
Good luck ah KwackS!SSSSSS!!!!!!!
The intentions seems to be good, but I am sure citizens from our neighboring countries will flock to Cambodia to buy and own properties. By the time my children see it, it will be too late to reverse the law.
2:38, I disagree. If you look around you see many jobs with foreign companies. Both my sisters work for two different Korean companies and my brother works for a Korean hotel.
Since Cambodia has been hit hard by global recession, now from top to bottom corrupt khmers officials need some money from owning the illegal land grabbing to sell their land. Don't expect any small and medium foreign investors to invest in Srok khmers since Cambodia does not has a legitimate land law. I won't buy a property in Srok khmers if I can't have a legal ownership, would you. Remember, a powerful could come in anytime and seize your property away for free.
don't forget too that over half of australia are desert waste land. now, who want to live in the desert of australia? don't be so naive to compare australia desert to cambodia's precious land of beautiful scenerio of river, tropical jungles, cool, pleasant seabreeze and riverbreeze, the land of enchanted angkor parks, exotic people, exotic site, sound, smell, etc... get educated, please!
4:42am
I'm glad they are lucky enough to get employed. But, do you know how many people are still under unemployment today? As a matter of fact employment is good, corruption-free is better. There's a world witness that
CPP's policy is to enrich no people but its ruling class. You know, many a CPP plutocrat/magnate is born in the last 2 decades. Nowadays, extreme wealth and extreme poverty cause our society unrest, and a revolt is underway.
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