Phnom Penh, Nov 14, 2008 (AFP) -
Impoverished Cambodia's land prices have fallen by up to 25 percent from a historic peak in June amid the global financial crisis and a border dispute with Thailand, valuers said Friday.
"The land prices countrywide have dropped between 20 to 25 percent by early November," Sung Bonna, the president of National Valuers Association of Cambodia, told AFP.
He said the main causes were "the world financial crisis", a border dispute with Thailand which made "the investors feel fear" and the government's restrictions on commercial banks.
"The big problem is that there are no buyers," said Sung Bonna, who is also the director of Bonna Realty Grou, a leading real estate agency in the kingdom.
Prices reached as high as 5,000 dollars per square metre in June in prime locations in the capital Phnom Penh but the boom came to an end as the country prepared for July elections, he said.
"After elections they began to drop gradually. Then when the global financial crisis happened, prices dropped hard," Sung Bonna said.
He urged the government to provide "ease to investors" and to allow foreigners to own property such as apartments and office buildings.
The government is considering allowing foreign ownership of property such as apartments and office buildings to boost the country's economic growth, officials have said.
Under the current rules, foreign property investments can only be made in the name of a Cambodian national and many are unwilling to risk losing their assets to unscrupulous local partners.
Cambodia has emerged from years of turmoil as a rising economy in Southeast Asia, posting an average of 11 percent growth over the past three years on the back of surging tourism, a strong garment sector and a construction boom.
But the International Monetary Fund recently said Cambodia's economy was expected to flounder next year as the world crisis deepened.
suy/dk/ft
