Land Price in Siem Reap Stagnates Ahead of Upcoming General Election
Famous for Angkor Wat temple, Siem Reap is becoming a popular real estate investment destination in Cambodia, largely thanks to its tourism attractiveness and lower land price compared to Phnom Penh. However, next year’s general election appears to be stagnating real estate transactions in the Siem Reap market, as it is an area of the Cambodia real estate market primarily dominated by foreign buyers and renters.
Mr. Mario Tan, Sales and Marketing Director of Hunter Estate, said: “land prices in Siem Reap are still low compared to that of Phnom Penh. Land prices in Siem Reap are not rising at the moment – with an average between $350 and $400 per square meter. However, the most expensive land price in Siem Reap is near Old Market or Phsar Chas – with prices similar to Phnom Penh: ranging from $3,000 to $5,000 per square meter.”
“Real estate transactions in the first half of 2017 were down 50 percent compared to the same period last year, due to political uncertainty and economic slowdown in Siem Reap and internationally. Land prices have stagnated in Siem Reap due to the slowdown of general real estate transactions in the province,” Mr. Mario suggests.
Echoing Mr. Mario’s view, Mr. Sarath Sok, Managing Director of SiemReapLand house.com, said: “land prices in Siem Reap sees neither increase nor decline, probably due to uncertainty ahead of next year’s general election. Regarding the rental market, in particular apartments and condos, it is increasing significantly but the price declines because supply is more than demand at the moment. Rental prices have decreased from $400 to $300 per month in many cases, for example.”
Meanwhile, Mr. Michael Kean, CEO of Solina Realty Consulting, said: “land prices in Siem Reap range from $110 per square meter in the outer areas around The Ring Road – to $700 per square meter closer to town. Land prices in the old market area are the most expensive, starting from up to around $3,000 per square meter.”
For Mr. Kean, vacant land within the city and within 25 Kilometers of the city – in such areas as Banteay Srey, where tourists are still coming in droves – offer a particularly good opportunity for real estate investment in Siem Reap currently.
For investors keen on real estate investment in Siem Reap, some business insiders suggested that Sala Kamraeuk is the developing but potential area at the moment with attractive, low land prices.
Mr. Mario suggests that wise investors should not invest in expensive property in Siem Reap, because it is difficult to resell for good return. Sala Kamraeuk is the developing but potential area with suitable land prices – between 250$ and $300 per square meter near the highway. This area is peaceful with a good landscape, good roads and international school for foreigners, making it comfortable for residential living.
Tourism has been the major driver of real estate investment in Siem Reap. The number of tourist arrivals keep increasing each year, with the recent report by Angkor Enterprise showing a 13 percent rise in tourist arrivals in the first half of 2017 compared to the same period last year.
Mr. Sarath added: “the most popular property for investment in Siem Reap is hotel sector. Investors, especially Chinese, prefer investments in hotels to serve the growing tourist arrivals each year. One hotel comprising 40 rooms can rent for up to $6,000 per month.”
According to a recent hotel study by Bonna Realty Group, the number of hotel rooms in Siem Reap continue to rise in the first semester of 2017 compared to the same period last year.
The study found that 3-star hotels in Siem Reap increased from 5,987 rooms from last June to 6,709 rooms as of June 2017. For hotels deemed to be 4-star, rooms in this category jumped from 8,132 rooms to 8,962 year-on-year. Meanwhile, 5-star hotels witnessed a decrease in room numbers, dipping from 6,699 last year to 6,131.
It is expected that land price in Siem Reap will rise in value again after the general election – with more chinese investors injecting money to drive the whole real estate sector in Siem Reap.
Mr. Mario is optimistic that general business, including the real estate sector, in Siem Reap will grow significantly after the national election.
“We can see the example of last election; real estate transactions before the election declined but after the election the transaction rose again,” states Mr. Mario.
“Our government has a good relationship with China and Chinese investors will inject more money to invest in real estate sector – not only in Siem Reap but also in Sihanoukville and Kampot.”
Mr. Mario added that, “There will be two big shopping malls coming soon in Siem Reap. The shopping malls will attract tourists to spend more money in the province, contributing to boosting the local economy. A strong local economy will eventually be a good sign for the entire real estate sector in the province.”