Property experts have hailed the Residential Property Price Index (RPPI), saying it will help Cambodia to some extent control rising property prices and reduce the risk of a crisis in the area.
PropNex Cambodia Real Estate managing director Ann Sothida said transactions and prices for houses or properties in Cambodia are currently “unclear” and there are no official records.
As such, the implementation of the RPPI is considered a “good start” as it would serve as a basis for measuring house price fluctuation according to a standard.
In a sense, the RPPI would allow the authorities to intervene or better manage the real estate sector and control the situation, she said.
“Not only does rising housing or real estate prices lead to inflation, but lower investment in the housing sector and low number of homeowners could also lead to an economic crisis.
“Thus, the RPPI is very important for the government [as it can] monitor fluctuating housing prices and intervene so people can afford to buy their own homes,” Sothida explained.
According to Century 21 Cambodia’s Executive Director, Grace Rachny Fong, the RPPI is a collection of “government-sponsored news and statistics” based on accurate data collection and formal analysis that is “acceptable” to all.
The index will make it easier for those looking for information on housing or land prices and will help the government to develop master plans.
Additionally, Grace said, the government would be able to monitor all transactions in the sector and collect taxes accordingly.
The index will also encourage the buying and selling of properties and make it easier for people, including foreign investors, to assess market prices, thereby encouraging them to invest in Cambodia.
“It will be easy to find information on housing and property prices in the areas they want. In this way, we build the confidence of foreign investors who wish to invest in Cambodia,” she told the Post on June 8.
President of the Cambodian Association of Appraisers and Estate Agents, Chrek Soknim, said the RPPI would become a tool for real estate professionals to make “accurate” housing valuations.
“When there is information about the housing price index, it not only facilitates local business transactions, but also attracts locals to invest in Cambodia,” he added.
At the launch of the RPPI on June 6, NBC Deputy Governor Chea Serey said it was a new step and a feat in compiling economic and financial statistics to analyze and assess the real estate and construction sectors.
The growth of the sectors is also part of the process of economic diversification which can increase resilience to any economic impact and absorb part of the labor force to serve the construction sector by supporting economic growth.
Prior to the Covid-19 outbreak in Cambodia, the construction and real estate sectors were key growth sectors, employing nearly 500,000 workers, according to a 2019 survey.
“Sectors have become important pillars of economic growth. Sector-related information and data are even more important for economic and monetary policymakers to monitor macroeconomic imbalances and assess risks that may arise in related sectors, especially the financial sector.
“The introduction of the housing price index will make a significant contribution to the monitoring, evaluation and formulation of development policies as well as measures aimed at minimizing risks in order to maintain macroeconomic stability,” said Sery.
In 2021, the Ministry of Spatial Planning, Urban Planning and Construction reported that there were 4,303 construction projects nationwide representing a floor area of nearly 13 million square meters. .
Total capital investment approved was over $5.33 billion, down 31.21% from 2020.