Southbound and dry, Phnom Penh’s land value surged on road announcement
Southbound and dry, Phnom Penh’s land value surged on road announcement
After selling out his land, Vet Da, a citizen of Chheung Eak commune, Dong Kor district, had mixed feelings. Knowing he could now sell his land for $30 per square metre but having sold it for $20 per square metre, before the municipality announced the construction of Road 217 and Somdech Decho Hun Sen Road at the end of 2014, leaves him with a stale aftertaste. The new roads will run through the middle of Phnom Penh satellite ING City and lead into the South of the greater Phnom Penh greatly increasing the value of the surrounding land by effectively integrating it into the capital.
Despite having sold his land too early to gain a maximum profit from the increased value after the announcement of the road projects, Da is happy for other landowners who are selling their property these days.
“I am really happy when the land sees such an increase in prices, and people in this area enjoy the benefit from the increasing prices since early this year,” he said. “The people’s livelihood has been changing for the better, and they are really appreciating it,” he added.
Land plots of four times 16 metres to build housing was priced at only $9,000 before the announcement, but currently, those plots sell from $12,000 to $13,000 per unit.Kim Heang, president of Khmer Real Estate, said that prices in the Dong Kor area surged after the Road 217 construction announcement because land plots of the mentioned had become popular for people who wanted to build simple flat houses there, though he feared that land owners took advantage of this new demand of home owners to be.
“There is concern that land owners are increasing land prices by themselves, but the most important issue is who is going to buy that land,” he said. “Chomkar Doung area in Dong Kor district is a factory, industrial area for middle- and lower-income people to live but not for wealthy people,” he added. With prices surging the medium and lower income segment, which could mostly benefit from the infrastructure upgrade, might be outpriced by the buyer market.
According to Kim, prices along the main road ranged from $300 to $500 per square meter already, while before any expansions were announced a square metre was valued at between $50 to $70.
Also Van Chanthorn, managing director of Town Real Estate Company, also observed an obvious land price increase along Road 217 since the expansion plans were announced. According to his estimates, land from Spean Dek to agricultural school Chomkar Doung ranged from $800 to $1200, while from the school to the Cambodia Beer Factory the price is estimated to be $500 per square metre.
“Many buyers are interested in land in the area because the area is comprised of many boreys, such as New World Borey, Chomkar Doung and more,” he said.One of the most obvious merits Phnom Penh offers was already pointed out by famous Cambodian architect Van Molyvann in early 2014.
In a speech he held in front of university students he said that the greater Phnom Penh area should expand to the South since the Southern area featured high land that did not deluge due to the Baasac River allowing water from the city to evacuate.
In the line with Molyvann’s speech, ING Holding Co, Ltd has been preparing 2000-hectares of land to set up a satellite city and three big roads—Hun Sen Boulevard, Hun Neang Boulevard, and a road from Chak Ang Rae Krom to Road 217.
Meas Viriya, vice director of the technical department of ING Holdings, said the three big roads would be finished by 2017. As of now, Hun Sen Boulevard was 80 per cent, Oknha Hun Neang Boulevard was 50 per cent, and the other, yet unnamed, roads were 20 per cent complete respectively, he said. These roads played a vital role to link Dongkor districts to the central city and provide an alternative to the congested National Highway 2 Meas added.
“Land prices jumped up after the road 217 construction announcements; however, I don’t know the details of land price developments,” he said.
