Cambodian Government to Allow Freehold for Foreigners, I won't hold my Breath
Nov 28, 2009Yet again there is a report that legislation to allow foreigners to buy property in Cambodia freehold is about to become law, according to a new report in the New York Times.
During the last boom Cambodia property became very popular with investors from all around the world, and rightly so; people were buying property and selling 6 months later for a 12% profit, 12 months later for a 24% profit on a regular basis. During this time a report that the government was coming closer to allowing foreigners to buy freehold would make the news at regular intervals -- we all waited and waited but it never came.
I was interviewed by a journalist from the Phnom Penh Post round about October 2007, and he asked me if I thought the law would go ahead, depending on who was elected (elections were coming up). I said, at the moment the government doesn't need to change the law, because the economy and property market are doing well, but I see prices levelling off in the next 6 months, at which point the government of the day may reconsider the law.
I was right about prices levelling off; little did I know that this would be followed by Cambodia and many other nations falling prey to the global downturn. Now that Cambodia has suffered quite badly, it is entirely possible that the government may make it easier for foreigners to buy property, as an incentive to choose the country and hopefully cash-in on the rising investment levels seen in other Asian nations.
At the moment foreigners can only buy Cambodian property by setting up a company with a Cambodian senior partner. If they don't want to go that route then they must buy on leasehold, though some developers are giving 99 year leasehold tenures which is full ownership according to some judicial systems.
At this stage however, it is unlikely that changing the law would have a major impact on Cambodian property investment -- certainly nowhere near the effect it would have had during the boom. The international real estate investment landscape has changed; currently the best opportunities lie in established markets, where below market opportunities abound. Established markets are also currently the favourites because of the reduced appetite for risk among private investors.
That said, Cambodia will always be one of the top emerging markets for property investment in my opinion. Before the downturn the economy was growing at a blistering pace of 10-11% per year, based on massive growth in the industrial and services sectors, with construction and real estate also generating significant revenues. This economic growth continued to increase the affluence of Cambodians, and property values and rents continued to grow.
Cambodia has also been left with a number of unique traits from the brutal Khmer Rouge rule:
* Most of male population is under 25; a young vibrant workforce
* Both commercial and private property sectors are relatively new, so pricing is still finding its grounding
* A determination among the entire population to drive the nation forward and to reach their full potential.
These traits made it very popular for retail and commercial investment, on top of the astonishing economic growth. It is likely that Cambodia will regain its popularity with property investors once the economy can return to growth, and the massive bargains start to dry up in established markets. If the new law is improved it will no doubt increase the fervour of this boost.
read more “Cambodian Government to Allow Freehold for Foreigners, I won't hold my Breath”
During the last boom Cambodia property became very popular with investors from all around the world, and rightly so; people were buying property and selling 6 months later for a 12% profit, 12 months later for a 24% profit on a regular basis. During this time a report that the government was coming closer to allowing foreigners to buy freehold would make the news at regular intervals -- we all waited and waited but it never came.
I was interviewed by a journalist from the Phnom Penh Post round about October 2007, and he asked me if I thought the law would go ahead, depending on who was elected (elections were coming up). I said, at the moment the government doesn't need to change the law, because the economy and property market are doing well, but I see prices levelling off in the next 6 months, at which point the government of the day may reconsider the law.
I was right about prices levelling off; little did I know that this would be followed by Cambodia and many other nations falling prey to the global downturn. Now that Cambodia has suffered quite badly, it is entirely possible that the government may make it easier for foreigners to buy property, as an incentive to choose the country and hopefully cash-in on the rising investment levels seen in other Asian nations.
At the moment foreigners can only buy Cambodian property by setting up a company with a Cambodian senior partner. If they don't want to go that route then they must buy on leasehold, though some developers are giving 99 year leasehold tenures which is full ownership according to some judicial systems.
At this stage however, it is unlikely that changing the law would have a major impact on Cambodian property investment -- certainly nowhere near the effect it would have had during the boom. The international real estate investment landscape has changed; currently the best opportunities lie in established markets, where below market opportunities abound. Established markets are also currently the favourites because of the reduced appetite for risk among private investors.
That said, Cambodia will always be one of the top emerging markets for property investment in my opinion. Before the downturn the economy was growing at a blistering pace of 10-11% per year, based on massive growth in the industrial and services sectors, with construction and real estate also generating significant revenues. This economic growth continued to increase the affluence of Cambodians, and property values and rents continued to grow.
Cambodia has also been left with a number of unique traits from the brutal Khmer Rouge rule:
* Most of male population is under 25; a young vibrant workforce
* Both commercial and private property sectors are relatively new, so pricing is still finding its grounding
* A determination among the entire population to drive the nation forward and to reach their full potential.
These traits made it very popular for retail and commercial investment, on top of the astonishing economic growth. It is likely that Cambodia will regain its popularity with property investors once the economy can return to growth, and the massive bargains start to dry up in established markets. If the new law is improved it will no doubt increase the fervour of this boost.
Cambodia B1.4bn loan still on[- Will Hun Xen still accept Thai charity?]
Prime Minister Abhisit Vejjajiva said yesterday Cambodia's decision to scrap a 1.4 billion baht loan from Thailand to subsidise a road improvement project was the result of a misunderstanding.
He was responding to a news report which quoted Cambodian Foreign Ministry spokesman Koy Kuong as saying Phnom Penh decided to cancel the loan.
Mr Abhisit said Cambodia thought Thailand terminated the loan so it sent a letter to inform the government that it would cancel the loan.
He said talks were under way to correct the mix-up. "Cambodia thought we had cancelled [the loan], so they sent a letter to cancel it," Mr Abhisit said.
"In fact, the cabinet hasn't made a decision on the loan scheme."
The 1.4 billion baht loan to upgrade a road from Surin to Siem Reap was discussed by the cabinet after the recent diplomatic spat erupted.
However, the termination of such an international agreement requires approval from parliament to take effect.
Thai-Cambodian ties turned sour when Cambodia's Prime Minister Hun Sen appointed Thaksin Shinawatra as an economic adviser.
Relations took a turn for the worse when Cambodia rejected Thailand's request for extradition of Thaksin to serve a two-year jail sentence and Thailand responded by threatening to review agreements and projects including the loan in question.
Mr Abhisit yesterday brushed aside former foreign minister Surakiart Sathirathai's suggestion that the government initiate talks with Phnom Penh to normalise the ties. He said the results of the meeting of the Thai-Cambodia General Border Committee (GBC), which concluded on Friday, were satisfactory.
Thani Thongpakdi, deputy spokesman of the Foreign Ministry, said yesterday the ministry received Cambodia's letter to terminate the loan deal. He declined to say if Phnom Penh's latest move was suggesting bilateral ties were further strained.
He said it was a normal practice for governments to review and if necessary cancel loan deals.
Meanwhile, the GBC meeting and the meeting between detained Thai engineer Sivarak Chutipong and his mother, Simarak na Nakhon Phanom, was seen as a good sign for bilateral relations.
Mr Sivarak, official of the Cambodian Air Traffic Services, was arrested on Nov 12 for allegedly stealing flight information concerning Thaksin. It took two weeks before his mother was allowed to visit him at prison.
His bail request is pending a court review.
Mr Sivarak is scheduled to appear in court for a first hearing on Dec 8.
read more “Cambodia B1.4bn loan still on[- Will Hun Xen still accept Thai charity?]”
He was responding to a news report which quoted Cambodian Foreign Ministry spokesman Koy Kuong as saying Phnom Penh decided to cancel the loan.
Mr Abhisit said Cambodia thought Thailand terminated the loan so it sent a letter to inform the government that it would cancel the loan.
He said talks were under way to correct the mix-up. "Cambodia thought we had cancelled [the loan], so they sent a letter to cancel it," Mr Abhisit said.
"In fact, the cabinet hasn't made a decision on the loan scheme."
The 1.4 billion baht loan to upgrade a road from Surin to Siem Reap was discussed by the cabinet after the recent diplomatic spat erupted.
However, the termination of such an international agreement requires approval from parliament to take effect.
Thai-Cambodian ties turned sour when Cambodia's Prime Minister Hun Sen appointed Thaksin Shinawatra as an economic adviser.
Relations took a turn for the worse when Cambodia rejected Thailand's request for extradition of Thaksin to serve a two-year jail sentence and Thailand responded by threatening to review agreements and projects including the loan in question.
Mr Abhisit yesterday brushed aside former foreign minister Surakiart Sathirathai's suggestion that the government initiate talks with Phnom Penh to normalise the ties. He said the results of the meeting of the Thai-Cambodia General Border Committee (GBC), which concluded on Friday, were satisfactory.
Thani Thongpakdi, deputy spokesman of the Foreign Ministry, said yesterday the ministry received Cambodia's letter to terminate the loan deal. He declined to say if Phnom Penh's latest move was suggesting bilateral ties were further strained.
He said it was a normal practice for governments to review and if necessary cancel loan deals.
Meanwhile, the GBC meeting and the meeting between detained Thai engineer Sivarak Chutipong and his mother, Simarak na Nakhon Phanom, was seen as a good sign for bilateral relations.
Mr Sivarak, official of the Cambodian Air Traffic Services, was arrested on Nov 12 for allegedly stealing flight information concerning Thaksin. It took two weeks before his mother was allowed to visit him at prison.
His bail request is pending a court review.
Mr Sivarak is scheduled to appear in court for a first hearing on Dec 8.
Hang tough if Hun Sen gets rough
LEGAL-EYED: Kao SouphaKao Soupha is a lawyer who is well used to government pressure.
The 37-year-old Cambodian believes that if a lawyer is afraid of the state, then many innocent people will have no chance to defend themselves.
For this reason he decided to represent jailed Thai engineer Sivarak Chutipong.
Mr Sivarak, 31, an employee of Thai-owned Cambodia Air Traffic Services, was arrested on Nov 12 on charges of leaking information concerning the flight plan of Thaksin Shinawatra as he travelled to Cambodia.
Mr Sivarak is being held at Prey Sar prison, pending a bail consideration and first hearing on Dec 8.
"I see he [Mr Sivarak] has a good chance of being freed as I believe he did not really steal the flight records," Mr Soupha said.
Mr Soupha admits his client was in a position to know of all the flights in an out of Cambodia but that Thaksin's flight plan was not a secretive matter.
Had Mr Sivarak "spied", he would not have left Cambodia and travelled to Laos on Nov 6 and returned to Cambodia on Nov 9, says Mr Soupha.
He acknowledged the arrest of Mr Sivarak was a headlining issue between the two countries, but it was not a complicated case because as far as he knew there was not much evidence supporting the plaintiff side.
Mr Soupha also believes the arrest of Mr Sivarak was politically motivated and the case should be resolved by the two governments.
"They are playing a game and Mr Sivarak is, unfortunately, in the middle," he said.
According to Cambodian law, if Mr Sivarak is found guilty of spying he faces a jail term of between seven and 15 years.
Mr Soupha specialises in providing legal counselling for Cambodian and foreign people. Most of his cases are concerned with human rights violations and alleged unfair treatment by the Cambodian government.
He often deals with the Thai community in Phnom Penh and is regularly contacted by the Thai embassy in Phnom Penh.
Abhisit's action: A lesson of political civility to the opposition for Hun Xen?
PM thanks red shirts for postponement of rally
Prime Minister Abhisit Vejjajiva Sunday thanked the red-shirt leaders for postponing the rally, and thus easing the situation before the celebrations of His Majesty the King's birthday.
"I would like to thank all sides for making the situation better. Earlier, the people were worried about the political rally," Abhisit said during his weekly TV programme.
Opposition distributes 50,000 leaflets about border dispute
Opposition activists were and are distributing Sam Rainsy's message attacking PM Hun Xen's government for causing the loss of Cambodian territories to the benefit of Vietnam. At the same time, SRP MPs are asking the government to make available to the public documents regarding the legal aspects of the border resolutions with Vietnam.
Numerous SRP activists in the entire country are currently distributing leaflets about the border problems to Cambodians. The SRP leaflets contain the message issued by Mr. Sam Rainsy to the people of Cambodia, dated 19 November 2009. The content of the message blames Hun Xen's government for leading a dangerous policy involving border problems. In the same message, Sam Rainsy also accused Hun Xen of turning the public attention to the western border with Thailand while ignoring the danger along the eastern border with Vietnam.
Yim Sovann, SRP MP and SRP spokesman, indicated today that his party plans to distribute 50,000 copies of Sam Rainsy's message to Cambodians at various places all along the country. According to Yim Sovann, the goal of this distribution is to inform the people about the border problems [and the loss of Cambodian territories] to the benefit of neighboring countries.
At the same time, SRP MP Son Chhay wrote a letter to PM Hun Xen asking the government to issue documents about the legal aspects taken by the government to resolve border disputes with Vietnam. Son Chhay's letter was forwarded by Heng Samrin to the government on Thursday, but so far there is no answer from the government yet.
Government officials could not be contacted to comment in this issue as of today, however, reports have indicated that the authorities have prevented and arrested a number of leaflet distributors and brought them in for education so that they stop taking such action again. Opposition leader Sam Rainsy was accused by the top three leaders of the ruling party (Xen, Xim and Xamrin) of instigating problem for political gain, and of disturbing the government work in its resolution of problems with Thailand.
The determination of the opposition party to distribute these leaflets is a new issue that increases further political tension in the country. The opposition's action takes place after Sam Rainsy's political immunity was lifted at the beginning of November.
.. Meanwhile the CPP is leading its PR campaign to discredit the opposition
A SRP official recognized that opposition party members have defected to the CPP, however, he said that defection is a personal right for each party member. Prey Veng SRP MP Chea Poch made this declaration after about 100 SRP party members defected to the CPP branch office in Meanchey district, Phnom Penh city in the morning of Saturday 28 November. The defectors allegedly include Sam Rainsy's bodyguards who used to be faithful to him. The defectors condemned Sam Rainsy for not leading the party properly and he allegedly never thought about party members at all (sic!).
read more “.. Meanwhile the CPP is leading its PR campaign to discredit the opposition”
Hun Sen - Thaksin Shinawatra : A Political Game?
(Photo: Reuters)By Maya Mary Kong
Cambodian Perspectives Review - November 2009
About the author:The press covers these last few days Hun Sen's stunning declarations of support for Thaksin. He appeared as a defender of the latter, even offering him a post of economic advisor. At his arrival at the airport in Thailand for the summit of ASEAN, he continues by saying that Thaksin is a « political victim » and compares him with Aung San Suu Kyi, the key figure of democracy and Burmese opposition. He adds that his « concerns » are also humanitarian . While Cambodia risks of being in one big humanitarian misery due to the growing poverty of the Cambodian population.
Maya Mary Kong is a Ph.D candidate in political science, Canada. Born in 1985 from a Cambodia father and an Australian mother, I wish to express my gratitude to my parents for their love, support during all these years and for transmitting to me their love for Cambodia. A particular thank is also expressed to the worldwide Cambodian community for its help and strong encouragement. I also wish pay homage to Khmer people who have lost their life for the country, and all those who dedicate a part of their life to lead actions for Cambodia. And finally, a special thoughts for people who suffer and die because of the extreme poverty.
Hun Sen's attitude irritated not only Bangkok but also caused questions to many observers, why a Prime Minister - whose political party has ruled the country for thirty years without sharing real power within the National Assembly - worries about the democracy and the humanitarian issues in the neighbouring country, Thailand. While his CPP party - installed to power in Phnom Penh in January 1979 and supported by Viet-Nam until this day - did not cease, since its landslide victory in July 2008 with the legislative elections, Hun Sen strengthened his clamp to suffocate all opposition voice while keeping the vast majority of the Khmer population in an extreme poverty in order to control it for political purpose.
Obviously, these declarations - emanating from such a high ranking official of Phnom Penh regime where nothing can be decided without Hanoi agreement - are not certainly unplanned. These declarations are found to be a double political game of Hanoi which fits clearly in a renewed geopolitical context in order to push the Vietnamese expansionism even farther.
This is the thesis that we want to defend in this short present article. Its goal is to bring some of elements to reduce information asymmetry, which is systematically perpetrated to the Cambodian people. The consequences of such an asymmetry were dramtic as well as devastating for Cambodia.
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