Since 2012, the market has stabilised and is funded by locals. The focus is mostly on prime areas preferred by expatriates.
Ease of setting up business has attracted to Cambodia the most foreign investors in Asean. While the spending power of Cambodians is growing, there is still a lack of quality retail malls with decent brands. This presents an opportunity for the development of the retail sector.
There is an oversupply of high-end offices but there's niche demand for affordable offices that can be leased at US$12 per sq m.
Cities like Sihanoukville has potential, but mostly in tourism and warehousing because it is a port city. It is being compared with other island destinations such as Phuket in Thailand and Bali in Indonesia with people believing that it will experience property growth reminiscent of Phuket 10 years ago. Already, a huge anchor resort-themed project with luxury residential and hospitality components is planned on Morakot island off the coast of Sihanoukville.
I believe the market will be stable in 2013 with no drop in prices. A domestic market is needed but loans are not easy to obtain. Bank loans still come with very high interest rates. However, with more competition, banks will be more innovative in offering bridging and end financing.
The economy is expected to grow in 2013, which will have a positive impact on the property market. Cambodia has a growing middle-income population. However, the problem with emerging markets is that products made are either the cheapest or high-end. Both don't represent the needs of the people.
At this stage, policies and guidelines for the next six to seven years are crucial to the country's economic growth.
This story first appeared in The Edge weekly edition of Dec 24-31, 2012.