Does that mean you didn't have to pick up its doodoo?Playboy wrote:The ones that I have lived in allowed pets. The last one I stayed in charged a management fee of $25 per month, which was collected around the 1st by one of the mountain bike riding security guards patrolling the streets.
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Property still booming?
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I thought Playboy was the pet, he was such a nuisance shitting everywhere. There needs to be a sinking fund for future maintenance, if not it all goes to shit pretty quickly.
- Dahon
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What is a borey? Is it one of those compounds surrounded with ten feet high concrete walls with crushed glass on top and thenrogerrabbit wrote:High end boreys and condos are not selling anymore. Reasonable priced condos and boreys other hand are selling very well still. Last condo where I lived, 50%-60% were locals. In Sihanoukville couple of condo projects 80% of buyers are locals. The younger generation are more willing to live in condos.PSD_Kiwi wrote:Construction on the outskirts of PP is booming, lweng (spelling) style boreys popping up all over the place and they're selling, at over the top prices...Condos aren't selling, Cambodians don't want to live in them.
a few gates for cars and separate turnstiles for pedestrians? And security cards looking at You from behind dark glass and TV
cameras sweeping the area? Are boreys only stuffed with houses or do they contain apartments as well?
What is common practice for condos, gated or walk-in?
"I think u can get the larger attached Platinum ones for $400pcm or so which is pretty good if u have a large family."
Do You mean USD400 per square meter of apartment area? I am a bit lost here...
Cambodia - tickets booked, moved on to mission planning DONE
Mission completed, reported to Col Braddock. DONE
Now ranting about the experience ONGOING
Mission completed, reported to Col Braddock. DONE
Now ranting about the experience ONGOING
all buildings are empty and they keep building and building... which is a good thing.. but buying here is not a good idea, how are you going to arrange maintenance on your apartment building for example!!? or you think everything is build here with German precision or something?
but you can also read here
http://www.khmer440.com/chat_forum/view ... 11&t=60623
but you can also read here
http://www.khmer440.com/chat_forum/view ... 11&t=60623
It seems you have an axe to grind. Have you invested and it has not turned out very well or something else?ClubBar wrote:all buildings are empty and they keep building and building... which is a good thing.. but buying here is not a good idea, how are you going to arrange maintenance on your apartment building for example!!? or you think everything is build here with German precision or something?
but you can also read here
http://www.khmer440.com/chat_forum/view ... 11&t=60623
We get it. All buildings are empty just like any fool who invests' head.
Don't you mean Japanese or even Swiss precision?
pew, pew, pew, pew!
Combodia has the macroeconomics factors in its favour,
Good GDP growth ✓
Young population ✓
More than 2 kids each couple ✓
Urban drift of the countryside population ✓
Salary growth ✓
Growing office, housing and retail demand ✓
Growing foreign investment✓
Bank progressively making housing loans easier ✓
Acceptable ratio of debt among the population ✓
Low default rates ✓
The only problem that I see right now is the luxury apartment segment which is in oversupply as rich locals prefer landed properties and investing in too small countryside towns that are at risk of depopulation due to urban drift.
Of course there are plenty of overpriced properties around Cambodia but it is up to the investor to
discern bad and good investment.
Yet in general the value of real estate has many reasons to keep growing and few to drop.
Even in case of an oversupplied market it is more likely to experience temporary stagnation rather than significant price drops.
The government choosing to impose large taxes on secondary and tertiary houses could trigger a large sale of units and a significant price drop but considering how much real easte the govt. officials hold I find that quite unlikely.
Good GDP growth ✓
Young population ✓
More than 2 kids each couple ✓
Urban drift of the countryside population ✓
Salary growth ✓
Growing office, housing and retail demand ✓
Growing foreign investment✓
Bank progressively making housing loans easier ✓
Acceptable ratio of debt among the population ✓
Low default rates ✓
The only problem that I see right now is the luxury apartment segment which is in oversupply as rich locals prefer landed properties and investing in too small countryside towns that are at risk of depopulation due to urban drift.
Of course there are plenty of overpriced properties around Cambodia but it is up to the investor to
discern bad and good investment.
Yet in general the value of real estate has many reasons to keep growing and few to drop.
Even in case of an oversupplied market it is more likely to experience temporary stagnation rather than significant price drops.
The government choosing to impose large taxes on secondary and tertiary houses could trigger a large sale of units and a significant price drop but considering how much real easte the govt. officials hold I find that quite unlikely.
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- MerkinMaker
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I agree with all of the above. The problem is that all of these and them some have already been factored into the current values, the property prices aren't aligned with the earning potential of the populace.jackrossi wrote:Combodia has the macroeconomics factors in its favour,
Good GDP growth ✓
Young population ✓
More than 2 kids each couple ✓
Urban drift of the countryside population ✓
Salary growth ✓
Growing office, housing and retail demand ✓
Growing foreign investment✓
Bank progressively making housing loans easier ✓
Acceptable ratio of debt among the population ✓
Low default rates ✓
The prices are currently held up by three groups:
* Rich Khmer's that don't have access/trust/experience with other investment channels
* Middle class Khmer's that had property from back in the day and now buy/sell/rent off of the back of that
* Chinese investors that want to hold a "few questions asked" dollar asset outside of mainland China
The problem is that these three are effectively trading among themselves. With the exception of the borey developments on the outskirts which is now quite clearly super saturated, there is no organic growth left in the market. It's all well and good speculators trading with the speculators but at some point Joe Average needs to step up make a purchase and convert those speculative bets into profits.
And that's not going to happen anytime in the foreseeable future because the salaries of professional urban Khmer's are so out of wack with the property prices. This will become very apparent with the current generation who will be first time buyers, in stark contrast to the older generation that bought some Toul Tom Pong shophouse back in the day for peanuts and now thinks he's a millionaire.
I disagree with the oversaturated market in the outskirts, i keep seeing major organic growth when prices are within reach of khmer families.
The sale of 10.000-25.000$ 4.5x20 land plots and building a 35.000$ very basic shophouse is very commonplace, i can count hundreds of diy dwellings coming up just in the porsenchey area. All built by the landlord and few workers, not by some major borey company. Most of this families make a couple of hundred dollars for each person every month but often have 3 breadwinners in the family which are sharing the same house.
The total house cost (very basic shophouse) is usually about 50k and about 4 to 5 people live together there.
They pay often about 10k as down payment and loan the rest often paying about 300$ a month collectively for 12 years. Considering salary growth the banks are very positive that these people will be able to pay back the loan. Even factory worker accomodation is growing in cost, now often reaching 40$+ a month for a small derelict room.
However I agree that very expensive properties are a dangerous asset as the buyers market for them is very limited.
Personally I much rather invest in 10 50k shophouse than a single 500k villa.
Also as salary grows construction cost grows as well, so if I am able to buy a property very close to it's current construction cost it is very unlikely that it will be cheaper as long as it is below 85k USD (above which the pool of potential clients shrinks rapidly) which is the current affordability limit in PP by my estimate.
Even a couple of construction workers with the current PP daily salary of 7.5$ are able to afford buying a plot and the materials for building their own (basic) house today.
I think many people underestimate the family income of the average urban khmer family, even factory workers brought in from countryside when counting overtime hours and weekend bonus now often reach over 200$ a month.
When we talk about highly priced units the discourse is very different, much attention must be given to the commercial use and ROI from rent, many pitfalls are present for a inexperienced investor here.
Yet a shophouse right in front of a new condo can rent for surprisingly high prices due the concentration of people, just recently I was talking to a pharmacist renting a very generic shophouse near Bali resort for 750$ a month, the house sells for 200k which is likely too high but the landlord can live a decent life just from that one house and doesn't really care about selling it.
The discrepancy between salary and housing prices is common place in every major city, from New York to Saigon and Calcutta the opportunity for a waiter or tradesman to buy a commercial property in the city is almost non existent.
This is focusing only on pp there is so much to talk about farmland, commercial spaces on national road, tourist areas and so forth.
Yet I know my answer here is incomplete as it is hard to have a proper discussion on a forum when there are so many nouances to the topic.
The sale of 10.000-25.000$ 4.5x20 land plots and building a 35.000$ very basic shophouse is very commonplace, i can count hundreds of diy dwellings coming up just in the porsenchey area. All built by the landlord and few workers, not by some major borey company. Most of this families make a couple of hundred dollars for each person every month but often have 3 breadwinners in the family which are sharing the same house.
The total house cost (very basic shophouse) is usually about 50k and about 4 to 5 people live together there.
They pay often about 10k as down payment and loan the rest often paying about 300$ a month collectively for 12 years. Considering salary growth the banks are very positive that these people will be able to pay back the loan. Even factory worker accomodation is growing in cost, now often reaching 40$+ a month for a small derelict room.
However I agree that very expensive properties are a dangerous asset as the buyers market for them is very limited.
Personally I much rather invest in 10 50k shophouse than a single 500k villa.
Also as salary grows construction cost grows as well, so if I am able to buy a property very close to it's current construction cost it is very unlikely that it will be cheaper as long as it is below 85k USD (above which the pool of potential clients shrinks rapidly) which is the current affordability limit in PP by my estimate.
Even a couple of construction workers with the current PP daily salary of 7.5$ are able to afford buying a plot and the materials for building their own (basic) house today.
I think many people underestimate the family income of the average urban khmer family, even factory workers brought in from countryside when counting overtime hours and weekend bonus now often reach over 200$ a month.
When we talk about highly priced units the discourse is very different, much attention must be given to the commercial use and ROI from rent, many pitfalls are present for a inexperienced investor here.
Yet a shophouse right in front of a new condo can rent for surprisingly high prices due the concentration of people, just recently I was talking to a pharmacist renting a very generic shophouse near Bali resort for 750$ a month, the house sells for 200k which is likely too high but the landlord can live a decent life just from that one house and doesn't really care about selling it.
The discrepancy between salary and housing prices is common place in every major city, from New York to Saigon and Calcutta the opportunity for a waiter or tradesman to buy a commercial property in the city is almost non existent.
This is focusing only on pp there is so much to talk about farmland, commercial spaces on national road, tourist areas and so forth.
Yet I know my answer here is incomplete as it is hard to have a proper discussion on a forum when there are so many nouances to the topic.
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- MerkinMaker
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I don't disagree that there are a large number of middle income Cambodians that can afford $50k shop houses on the outskirts of town, the problem is that supply has far outpaced demand and now lots of them are sitting empty. I live outside of town, we build about five years ago and then we were in a quiet leafy neighbourhood. Now there are borey's everywhere and most of them are empty or mothballed.
The one nearest my house, that was built about two years back (and sold out) now has for rent or for sale signs on nearly every door. Two more close by are clearly stalled and one more started last year is mothballed and the vegetation is slowly taking over the shells. Like Ricecakes said, nothing is moving at the moment, I think we are primed for a major correction and we're just waiting for the trigger to get the ball rolling. As for triggers take your pick:
- Large developer goes tits up and dumps their inventory (exposing true market price)
- Election
- Big Facebook panic/scandal because developer doesn't back up buy back claim
- Big Facebook panic/scandal because bank forecloses on developer and people holding a loan document rather than a land title realize the developer had used the land as security.
This would actually be a good time to be liquid, as there will likely be some great opportunities. I say that for two reasons, firstly because Cambodians are very susceptible to group think and secondly they tend to be pretty quick to hit the panic button.
Those two things combined are dangerous. The current collective belief is that you can never lose money on property, I think once that belief is shattered people will hit the panic button and try to dump everything because the new group think will be that if you don't sell today, tomorrow it will be worth nothing.
This isn't 2008 when the last stall happened. Then it was mostly the wealthy that were exposed and everyone could ride it out because no one (developers or buyers) was leveraged, now everyone is leveraged up to the eyeballs. That changes everything, leveraged buyers can collectively just walk away from negative equity and sink the developer, there's no legal mechanism or recourse to prevent it. Banks can get the shakes and not give developers any wiggle room.
The one nearest my house, that was built about two years back (and sold out) now has for rent or for sale signs on nearly every door. Two more close by are clearly stalled and one more started last year is mothballed and the vegetation is slowly taking over the shells. Like Ricecakes said, nothing is moving at the moment, I think we are primed for a major correction and we're just waiting for the trigger to get the ball rolling. As for triggers take your pick:
- Large developer goes tits up and dumps their inventory (exposing true market price)
- Election
- Big Facebook panic/scandal because developer doesn't back up buy back claim
- Big Facebook panic/scandal because bank forecloses on developer and people holding a loan document rather than a land title realize the developer had used the land as security.
This would actually be a good time to be liquid, as there will likely be some great opportunities. I say that for two reasons, firstly because Cambodians are very susceptible to group think and secondly they tend to be pretty quick to hit the panic button.
Those two things combined are dangerous. The current collective belief is that you can never lose money on property, I think once that belief is shattered people will hit the panic button and try to dump everything because the new group think will be that if you don't sell today, tomorrow it will be worth nothing.
This isn't 2008 when the last stall happened. Then it was mostly the wealthy that were exposed and everyone could ride it out because no one (developers or buyers) was leveraged, now everyone is leveraged up to the eyeballs. That changes everything, leveraged buyers can collectively just walk away from negative equity and sink the developer, there's no legal mechanism or recourse to prevent it. Banks can get the shakes and not give developers any wiggle room.
Buying new boreys is often a bad investment as the prices are generally too high, personally I prefer to find properties in other ways and pay much lower prices for similar units.
Anyway the 2008 real estate crash here was due to the world financial crisis which was triggered by banks shutting down lines of credit in panic, sending numerous developers (especially Korean and Japanese) belly up due to lack of cash flow.
You would need another financial crisis to trigger something similar.
At the moment a lot of projects that where mothballed in 2008 are now coming back to life like the boojoeung town project and the lion city mall which remained dormant since the 2008 bankruptcy of boojoeung bank in Korea.
Also khmer people are not really as leveraged as you say, the numbers are still very healthy.
Could prices drop from a financial crisis?
Sure but using most algorithms the real estate market is healthy and sustainable, usually before a bubble you can find quite clear signs of exponential and unsustainable growth which aren't present at the moment.
The current slowing down in the middle of the elections is very mild, I personally expected and hoped for a visible drop in prices as I liquidated a good part of my positions, as long planned, before the commune elections but it just isn't happening yet, a bit of stagnation at most. We will see what's going to happen during the general election but khmers expect prices to rise again after that.
You need to note that most developers don't build units unless they are sold already and even when they sell units with very low deposit you are actually loaning money from a partner bank which will cover the construction cost and the developer will cover part of the interest.
Large projects now almost always involve at least 3 major elements, the landlord, the developer, a partner bank.
The major part of the risk in case of a major market correction sits on the landlord shoulder which is the last one to get paid.
The only way for very large amounts of units to go on the market at a low price is from khmer elites owning large inventory selling in panic, that is likely only in a major political shift of a massive credit crunch.
Most of the units sitting empty around for sale are just way too greedy speculators hoping to sell those units for a much higher price than they bought it.
Many locations need a correction in asking prices as they have grown way too much but the real market prices come up regularly when people need to sell due to some form of family emergency.
Anyway it would be interesting to know your location, I would like to give a look to that borey which is abandoned.
Anyway the 2008 real estate crash here was due to the world financial crisis which was triggered by banks shutting down lines of credit in panic, sending numerous developers (especially Korean and Japanese) belly up due to lack of cash flow.
You would need another financial crisis to trigger something similar.
At the moment a lot of projects that where mothballed in 2008 are now coming back to life like the boojoeung town project and the lion city mall which remained dormant since the 2008 bankruptcy of boojoeung bank in Korea.
Also khmer people are not really as leveraged as you say, the numbers are still very healthy.
Could prices drop from a financial crisis?
Sure but using most algorithms the real estate market is healthy and sustainable, usually before a bubble you can find quite clear signs of exponential and unsustainable growth which aren't present at the moment.
The current slowing down in the middle of the elections is very mild, I personally expected and hoped for a visible drop in prices as I liquidated a good part of my positions, as long planned, before the commune elections but it just isn't happening yet, a bit of stagnation at most. We will see what's going to happen during the general election but khmers expect prices to rise again after that.
You need to note that most developers don't build units unless they are sold already and even when they sell units with very low deposit you are actually loaning money from a partner bank which will cover the construction cost and the developer will cover part of the interest.
Large projects now almost always involve at least 3 major elements, the landlord, the developer, a partner bank.
The major part of the risk in case of a major market correction sits on the landlord shoulder which is the last one to get paid.
The only way for very large amounts of units to go on the market at a low price is from khmer elites owning large inventory selling in panic, that is likely only in a major political shift of a massive credit crunch.
Most of the units sitting empty around for sale are just way too greedy speculators hoping to sell those units for a much higher price than they bought it.
Many locations need a correction in asking prices as they have grown way too much but the real market prices come up regularly when people need to sell due to some form of family emergency.
Anyway it would be interesting to know your location, I would like to give a look to that borey which is abandoned.
I had a chat with a Chinese guy who works for a "big corporation in Beijing" and he's in SHV and PP sniffing out land and construction opportunities for his company. He was taking about 100s of millions of $ his company wanted to invest, as they already had in the past.
He said they (and others) are waiting for the elections next year and he said when/if the CPP get back into power there will be a crazy rush to get things signed off and rolling. He said he laughs when he overhears westerners in SHV commenting that the place is being overrun with Chinese and they are pushing up land prices too high. He said just wait until 2018!
There are also some places that have been cleared and a road put in with plots marked out but the sellers will not sell yet as they said come back next year. WTF!
He said they (and others) are waiting for the elections next year and he said when/if the CPP get back into power there will be a crazy rush to get things signed off and rolling. He said he laughs when he overhears westerners in SHV commenting that the place is being overrun with Chinese and they are pushing up land prices too high. He said just wait until 2018!
There are also some places that have been cleared and a road put in with plots marked out but the sellers will not sell yet as they said come back next year. WTF!
pew, pew, pew, pew!
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- MerkinMaker
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2008 wasn't caused by the financial crash, which had very little impact on Cambodia. The bubble was already huge and was just waiting for the pin prick to make it pop. I called the last property crash here a year in advance, long before the GFC.jackrossi wrote:Anyway the 2008 real estate crash here was due to the world financial crisis which was triggered by banks shutting down lines of credit in panic, sending numerous developers (especially Korean and Japanese) belly up due to lack of cash flow.
You would need another financial crisis to trigger something similar.
And I'm calling this one also. It's already staring over the edge, now it's just waiting for something to give it a nudge, and I wouldn't be surprised if it happened before the election.
Don't be fooled by Chinese construction. The market forces driving that are nothing to do with faith in Cambodia and everything to do with mainland Chinese wanting to hold USD assets outside of China but being able to pay for them in China using CNY, therefore circumnavigating laws to prevent Chinese from taking money out of the country. Most of the buyers have never even set foot in Cambodia.
100% agree. It's supply and not demand driven. Not sure how many people on this site actually go out to the Phnom Penh 'countryside' and realise what is going on 'out there' - a visit to Areyksat (Skyland, Orange Sky etc) or the CCV side of Prek Pnov bridge (both north and south) will give people some idea of the vast construction planned or in progress for the city. We have the dubious pleasure of combing these areas twice weekly - the landscape changes on a weekly basis. If all this construction comes to completion, PP will soon be able to house the whole of Cambodia.starkmonster wrote:2008 wasn't caused by the financial crash, which had very little impact on Cambodia. The bubble was already huge and was just waiting for the pin prick to make it pop. I called the last property crash here a year in advance, long before the GFC.jackrossi wrote:Anyway the 2008 real estate crash here was due to the world financial crisis which was triggered by banks shutting down lines of credit in panic, sending numerous developers (especially Korean and Japanese) belly up due to lack of cash flow.
You would need another financial crisis to trigger something similar.
And I'm calling this one also. It's already staring over the edge, now it's just waiting for something to give it a nudge, and I wouldn't be surprised if it happened before the election.
Don't be fooled by Chinese construction. The market forces driving that are nothing to do with faith in Cambodia and everything to do with mainland Chinese wanting to hold USD assets outside of China but being able to pay for them in China using CNY, therefore circumnavigating laws to prevent Chinese from taking money out of the country. Most of the buyers have never even set foot in Cambodia.
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