When talking about ownership of land properties in Cambodia, a question might be simply asked: do you hold soft or hard title deed for your owned property?
Soft Title Deed: an ownership certificate which is, during ownership transferring or registration, only recognized at the commune and district level. Low cost, high risk as there might be many people who own or claim on one property, no paying tax issues etc…
Hard Title Deed: an ownership certificate which is, during ownership transferring or registration, not only recognized at the commune and district level but also at ministerial level and is issued by the Cadastral Office. High cost, low risk as there is only one owner, paying tax issues etc…
During the recent real estate boom and nowadays, when buying and selling the properties, many transactions or ownership transfers are still largely done with soft title deeds and at the commune and district level. The main reasons are that the related parties (sellers, housing developers, buyers, speculators etc…) want 1) to do quick transaction which is usually done less than a week, 2) to avoid paying the higher transaction costs including property registration tax at 4%, ownership transfer fees, other taxes and the ownership transferring process at the Cadastral takes more than a week or sometimes than a month.
For home loans, here in Cambodia, most commercial banks accept only the hard title deed of property as collateral pledged when home buyers seek loans from them. Although Acleda Bank also accept soft title deed and the interest rate charged is relatively high at 13% p.a. or even more than this for other private lenders .
Overview
Does the real estate sector in Cambodia is getting better or worse? Some optimists said that the situation is now getting better or the real estate sector is being recovered back. Although, many large others thought that this sector has not been recovered yet. Many house properties or lands have been posted for sale but there are few transactions done because its selling prices are still too much high even some people said that it has been reduced around 30% to 40% from its peak during 2008; many constructions of condominium such as Gold Tower 42 and International Finance Center (IFC) or of shop houses are seen to be on hold; the cost of the mortgage (home loan) remains high between 10% to 18% p.a. etc…
Housing development
For the past few years, the housing in Phnom Penh and especially in the outskirt has been strongly developed. Some questions can be asked: how many property developments in the outskirt of Phnom Penh do have the proper construction approval from the relevant authorities? Has the quality of those constructions been checked? Is there any proper sewage system planned or built? As the result, during the flash flood in October, since the sewage system has not been built, many new houses were seen under the water!
Office space
According to CBRE, the office space in Phnom Penh is forecasted around 144,000 square meters by 2013. This projection was likely based on the figures from Gold Tower 42, International Finance Center (IFC), Canadia Tower, Delano Business Center, Icon Tower, Phnom Penh Tower, B-Ray Tower etc…The renting price is known to be between $10 to $35 per square meters.
