Recent laws allowing foreigners to own apartments and condominiums were introduced last year and have already had a positive effect on the property market.
However it still remains a little sluggish, even though the number of property transactions tripled since the foreign ownership law was approved by King Norodom Sihamoni in May 2010. The tax revenue from property transactions increased by 60% to US$19.5 million up from US$12.2 million in 2009.
Un Mouy, of Two Town Company, who is the developer of Bal Resort said that 80% of the project has already been sold with 60% of it being sold to overseas buyers. He credits the new law for these good sales figures. It's the same story for the Camko City megaproject who has sold increasing numbers of condos to foreigners since the new law was passed.
It's estimated that as much as 70% of luxury property in Cambodia is reliant on overseas investors. The law had been amended as far back as 2005 to allow foreign investment in buildings, but was never put into practice due to Cambodia experiencing a property boom.
During the property boom the price of residential property rose by about 25% to 40% annually between 2004 and 2007. At first this property boom was confined to popular regions such as Phnom Penh and Siem Reap, but it soon spread right across the country.
The construction boom in Phnom Penh was largely fuelled by overseas investment with the government favouring wealthy developers. However it remains against the constitution for foreigners to own land even though it can be held on long leases and through majority-owned local companies incorporated in Cambodia.
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