Some apartment owners in Sihanoukville are struggling to pay off debts, borrowed specifically to build apartments to rent to Chinese nationals, after tens of thousands of Chinese people left Sihanoukville, following a recent ban on online gambling.
In an interview with RFI Khmer, a provincial coordinator for ADHOC in Preak Sihanouk, Ms. Cheap Sotheary, said those borrowed money from banks to build apartments for renting out to Chinese people are facing with a potential risk of not being able to pay off their debts.
To attract more tenants, some owners lowered down their rental fee as low as 50 percent, she added.
On August 18, prime minister Hun Sen issued a directive that halted the issuance of new internet gambling permits and that means the existing licences will not be renewed once expired. The government claimed the move is to address the rising cases of money extortions around online gambling venues.
The gaming industry is believed to be one of the main reasons that drew both investors and tourists from China to Cambodia over the past few years, especially to Sihanoukville, Bavet and Poipet where the industry booms.
The flash investments and sudden influx of Chinese people caused property prices high in town and growing demands of accommodations.
Hundreds of new apartments were recently built mostly by locals who borrowed money from banks to supply this huge demand. That’s why they are crashed when a large number of Chinese people left the city.
According to a report by Khmer Times, from August 18 to September 7, about 140,000 Chinese nationals left Cambodia.
At the Cambodia’s Q3 real estate market update, Mr. James Hodge, director of CBRE Cambodia said that the government’s recent ban on online gambling started having impacts on the country’s real estate sector specifically in Sihanoukville.
Mr. Hodge said, “generally speaking we started to see some reduction in land prices in Sihanoukville, as some people are putting lands on the market there.”
Mr. Kim Heang, CEO of Khmer Real Estate also echoed James’s observation on the impact of the ban.
Speaking at Realestate.com.kh Expo 2019 earlier this month, organised by Realestate.com.kh, he said the continued departures of Chinese citizens from Cambodia will affect the property sector in Sihanoukville, Poipet and Bavet.
He said, “for the buildings in Sihanoukville that used to be rented out for $20,000 a month, no one is renting them now, even for $8.000 a month, no one is renting them too,”
To minimise the negative impacts that happening right now on the real estate sector, Mr. Kim Heang suggests the government to continue to issue online gambling permits for those who are currently operating in Cambodia for another year. He believes the move will help stabilise the property market.
On the other hand, Mr Cheng Kheng, CEO of CPL Cambodia, thinks that the impact on the real estate sector is very minimal. He believes the ban will help stabilise the sector instead and that gambling is not bringing stability and long-term investments to the country.
Phan Soumy is a content writer at Realestate.com.kh
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