Survey gives insight into city’s land prices
Extreme variation in property types and price points can often make home searches in Phnom Penh exhaustive and frustrating. A lack of standard market prices makes it difficult to understand the extreme variations and determine price versus value. The Capital’s first ever land price survey, released in March, gives insight into where values currently stand.
The survey, initiated and facilitated by VTrust Real Estate Group, interviewed 660 property owners in all nine official districts of the city’s boundaries. Prior to this survey there was little information about where market values were, and asking prices were being set on a property by property basis. Even now, this 2014 survey yields inconsistent results because of the lack of available data. However, the survey gives a starting point to begin evaluating market standards and changes.
The highest population density is currently in the city’s four core districts where there is more infrastructure and commerce. These districts cover large areas and vary greatly in size and population making them difficult to compare. The data becomes more relevant when using major city landmarks and using them as points of comparison for property pricing.
Currently property near the Royal Palace and Independence Monument are comparable to one another and the highest in the city. Property asking prices in these two neighbourhoods are 36 percent higher than the city average, which can be found on properties near Toul Sleng Museum. Comparatively to the North of the city, property asking prices can be found at 31 percent lower than Toul Sleng when looking near Toul Kork and Orussey Markets. Asking prices in these areas are comparable to each other and the lowest in the city, nearly 49 percent lower than near the Royal Palace and Independence Monument. For people looking to live in the South of the city, property asking prices near the Russian Market are comparable to those of the neighbourhoods on the North end at 29 percent lower than the city average.
According to the survey, variation in cost can be attributed to how “Economically Important” an area is deemed. This is judged based on residential and commercial development, infrastructure, and proximity to shopping centres and schools.This could explain why the BKK1 and Riverside neighbourhoods are amongst the highest in the city, as both have experienced significant foreign development in the last five years. Neighbourhoods like Toul Kork and Russian Market are still developing rapidly, though property asking prices remain lower. As better infrastructure, like drainage, are built and international businesses continue to build and prosper, these neighbourhoods can be expected to follow suit.
The Land Price Report projects that land prices will increase 10 to 15 percent this year. Prices are expected to continue climbing with the introduction of the ASEAN Economic Integration, which strives to promote economic cooperation and growth between 10 Southeast Asian nations. This is expected to increase foreign investment and the number of transactions taking place. The influx of foreign investment into Cambodia is also likely to help build a standardized system for valuation and pricing in the Cambodian property market.
Author: Leah Valencia
Photo Credit: Chris Desaulniers
Source: Elevated Realty Co