Tourist growth helps boost property market in Cambodia
The number of tourists visiting Cambodia has increased in the first half of this year with authorities now predicting more than 2.3 million visitors for 2008.
The Ministry of Tourism said numbers were up more than 14% compared with last year. A spokesman said political stability and infrastructure improvements had increased the number of tourist arrivals to the country. Some $1.64 billion is expected to be generated in 2008 from tourism alone.
According to specialists this means a boost for those with buy-to-let property in the country as these latest figures are part of a trend. Visitor numbers reached 2 million in 2006, and rose a further 20% in 2007.
'This sustained and aggressive growth in the tourist sector, as well as booming construction, property and garment manufacturing sectors is helping the country's economy to enjoy near double-digit growth,' said a spokesman for David Stanley Redfern.
The real estate sector, in particular, is growing at a phenomenal rate and no more so than in the capital Phnom Penh where land doubled last year to $3,000 per square metre, up from just $500 in 2000. 'Add to this the growth in the tourism sector and rental yields in the city are also expected to grow,' he added.
Once known as the 'Pearl of Asia', Phnom Penh is a significant global and domestic tourist destination for Cambodia. The city is the wealthiest and most populous in the country; it's commercial, political and cultural hub and is home to more than two million people.
French villas along tree-lined boulevards remind the visitor of its colonist heritage, yet its oldest structure is the Wat Phnom from the founding days of the city, constructed in 1373. The French however, certainly left their mark and parts of the city are filled with colonial villas, French churches, boulevards, and famous landmarks such as the Art deco market Phsar Thom Thmei and the Hotel Le Royal.
Proving popular are apartments in the chic riverside French quarter from as little as £49,000. These authentic French colonial period buildings have been completely refurbished and modernised and are expected to appreciate by 15 to 20% per year. The developer is currently offering a rental guarantee of 9% for the first two years, making this a safe investment in an aggressively growing market. by http://www.propertywire.com
Cambodia introduces new regulations for developers and real estate agents
New regulations are being introduced in Cambodia to protect property investors from fraud as the country's real estate industry booms.
Developers will be required to deposit a sum with the National Bank of Cambodia before being allowed to begin construction on a project under new regulations aimed at curbing fraud.
Payments from buyers will be held in this account with the aim of making the whole payment system more transparent and avoid developers using money illegally. It will also allow the government to intervene if developers fail to honour their contracts.
Real estate agents and developers will have to obtain a licence from the Ministry of Economy and Finance to sell projects and face legal action and even closure if they fail to do so.
The new rules mean developers and agents must comply by the end of September, a spokesman for the Economy and Finance ministry said.
There will be costs to the developers and agents involved but officials believe this will deter cowboys. 'Real estate developers will be required to deposit 2% of the projects' total value at the National Bank of Cambodia,' said Mao Pao deputy chief of the ministry's real estate division. http://www.propertywire.com
Law change will benefit foreign property investors in Cambodia
Foreigners could be allowed to buy property freehold in Cambodia by the end of 2008 under an amendment to the property laws being considered by the Government.
Nuth Nurang, Secretary of State at Cambodia's Ministry of Land Management, Urban Planning and Construction said growing demand has fueled the decision.
Currently the best option for foreigner investors is to buy on a leasehold tenure of up to 99 years. Another option is to form a company with Cambodian partners but this carries complex tax issues and needs to be considered carefully.
The announcement from the Government means that even those buying now won't miss out. It is possible to draw up a contract that includes an option to buy freehold when the new law comes in.
That is exactly what David Stanley Redfern is doing. Their French Colonial Apartments in the capital Phnom Penh are on a 99 year leasehold tenure. The contract includes the option to buy the properties freehold if and when the law is amended. They expect that foreigners will be buying freehold in Cambodia before the end of the year, if not sooner.
The change in ownership law is likely to blow the Cambodian property market wide open. It comes at a time when multinational companies are not only setting up shop in the emerging market, but are making Cambodia their South East Asian operations hub.
This is likely to have a big effect on the economy. The big banks, for example, often have to pay more to get the best out of their workforce, and they are also giving perks like health insurance and dental plans. Staff are getting promoted and getting pay-rises to keep them in the company.
It means that Cambodian's in stable and well paid employment have money to spend on their accommodation, rented or bought. Talk of some of the big car companies opening operations in Cambodia can only add to a higher standard of living and a positive effect on property prices.
'We will require a developer to open a housing development account at any commercial bank to enable buyers to make payments through the bank,' he added.
The price for the new licences for selling or renting will depend on the scale of the project. Until now developers only needed a letter of permission from the Ministry of Land Management, Urban Planning and Construction and an investment licence from the Council for the Development of Cambodia.
There are estimated to be around 100 developers currently operating in Cambodia, many of them quite small. Some said the new regulations will be too costly and put them out of business.
Capital Phnom Penh has undergone an unprecedented construction boom over the last several years, including a number of residential and commercial mega-projects that are set to transform the capital from a sleepy backwater. Text by http://www.propertywire.com
1:44 AM
John
