Land prices soar on capital’s airport announcement
Land prices soar on capital’s airport announcement
News of a new airport has sent prices skywards, but some say there is little to justify the sudden price hike.
The recent announcement that a new international airport to serve the capital will be built in Kandal province’s Kandal Steung district has sent land prices in the area soaring, but property experts suggest the assumptions fuelling the stratospheric price hike may be faulty.
Earlier this month the government announced it had approved a plan by a joint venture between local developer Overseas Cambodia Investment Corporation (OCIC) and the State Secretariat of Civil Aviation (SSCA) to construct a new airport for the capital on 26,000 hectares in Kandal province at an estimated cost of $1.5 billion.
According to local residents, prices on agricultural land in the area around the future airport, which previously ranged from between $2 to $3 per square metre, shot up nearly 1,000 percent following the announcement. Sale signs have appeared throughout the district with landowners asking $15 to $30 per square metre for the swampy undeveloped land.
The landowners appear convinced the airport’s construction will be a boon for residential property development.
However, Ung Bunthoeun, who previously lived within earshot of Siem Reap’s airport, is not convinced. Writing on his social media account he noted that in developed countries the announcement of a new airport does not improve adjacent property values, and often it lowers them.He explained that unlike land near train stations, which offer residents a convenient commute to work or schools, those near airports offer little added value while increasing risk of aviation accidents. Moreover, residents suffer constant disturbance from aircraft noise.
“I used to live near an airport, so I understand how all these problems exist,” Ung wrote.
He added that even if one’s land were located within the master plan of an airport it would be unlikely to fetch a high price as in the case of a national infrastructure project it is the state that determines the sale price.
Ann Sothida, director of CBRE Cambodia, said the massively inflated prices being demanded for land surrounding the planned site of the new airport were illogical as prices should not go up before the infrastructure is built. Yet these types of projects require five to 10 years to complete.
Sothida said the new airport could bring more infrastructure to the area, such as roads, water networks and electricity lines. However, it will also result in more noise pollution and require height restrictions on buildings, making the land unsuitable for condominium towers and other residential projects.
“Areas near airports are not suitable for residential properties as they are affected by the noise of planes taking off and landing,” she said.
Yet speculators appear to be factoring in reports that the airport will be developed as part of a much broader mixed-use project dubbed Airport City.
According to SSCA spokesman Sinn Chanserey Vutha, the airport will only occupy 700 hectares of the 26,000 hectare land earmarked for development. The government has also approved OCIC’s plan to develop a commercial centre and residential properties on the remaining land.
“Investing in an airport alone won’t allow the investors to generate profit, so there must be commercial centres and other amenities nearby to attract customers,” Vutha previously told The Post.
Mean Savath, a resident of Kandaok commune in Kandal Steung district, said he was happy to hear about the new airport project and expects it will bring much-needed development and jobs to the area.
“I’m very happy, because if there is an airport in this area it will create more jobs for the local residents,” he said. “I hope it will help enhance the livelihoods of people living here and will help this area develop more quickly.”
Like most residents in this poor agricultural community, Savath owns his house but not the land it was built on. He said he was surprised to learn how quickly property prices skyrocketed after the airport was announced, but said the only people who stood to profit from this were the wealthy landowners.
“They must think the area surrounding the airport will be heavily developed so they are demanding crazy prices,” he said.
