Land prices in the capital’s Sen Sok and Tuol Kork districts saw a slight decrease in the second quarter relative to the year’s first quarter, which was blamed on a stagnant property market from earlier this year.
Land prices across Sen Sok district have been sluggish since the beginning of 2016, causing the list price ratio to drop slightly to 99 percent from the previous quarter, as property sellers try to determine a reasonable market price, according to the latest report from VTrust Appraisal Co. Ltd.
However, Sen Sok district has experienced rapid growth, especially in residential, commercial and infrastructure development. “Land prices in the whole district increased markedly over the last couple of years,” the report stated.
“By the end of 2013, the average market price of land in Sen Sok was $380 per square meter. In the first half of 2016, the average market price in the district rose to $690 per square meter, with an average growth of 27 percent year-on-year from 2013 to 2015.”
Meanwhile, Tuol Kork district experienced a slight rise in land prices within the same period, from an average market price of $2,150 per square meter in 2013 to $2,530 per square meter in early 2016, growing at six percent year-on-year within the same period.
“However, across Tuol Kork district, the Q1-to-Q2 2016 list price ratio dropped to 99 percent due to real estate market stagnancy since the start of this year,” the report read.
Hoem Seiha, director of research at VTrust Appraisal, said because prices have increased over the past three years, a one percent decrease doesn’t really affect the price, as per the report.
“The prices in the two districts increased during the past three years (from 2013-2015), namely Tuol Kork (six percent year-on-year) and Sen Sok (27 percent year-on-year). Nevertheless, both Tuol Kork and Sen Sok’s land prices dropped slightly one percent during the second quarter of 2016,” Mr. Seiha wrote in an email.
“The increasing prices of land affect the profitability of the development projects. However, land prices in Cambodia are much lower than those in other cities of our neighbor countries. Therefore, there is still a big margin for development profitability.
“The market started to show sign of slowing down since the fourth quarter of 2015. The whole year is foreseen to be a bit sluggish,” he added.
Despite the recent slowdown, both Sen Sok and Tuol Kork, which lie northwest of central Phnom Penh, have enjoyed rapid growth in terms of residential and commercial development, the report said.