Foreign Property News | Posted by Aye Myat Thu
Real estate insiders are concerned about the effect that China’s decision to restrict large-scale capital outflows is having on the Kingdom’s market.
Two years ago, China implemented a set of policies that imposed additional restrictions on outbound investment. The aim was to address concerns about large-scale capital outflows and mitigate perceived risks to China’s financial system from rapid overseas investment.
With about 40 percent of total FDI inflows in the Kingdom coming from China, growth in the local real estate sector has been affected by these policies, according to some insiders.
King Heang, regional operating principal of Keller Williams Cambodia, told Khmer Times last week that condominium sales have seen a slowdown as a result of China’s policies.
“Land prices are rising, partially due to the influx of Chinese investors coming into the country,” he said.
However, he argues that China’s capital outflow restrictions might be a good thing, as they can play a part in stabilising the local real estate market by making it less reliant on investors from just one country.
Paul Ellender, manager of Freer Properties (Cambodia), said he can also see the impact of the Chinese policies.
“My fear is that, since China is the single largest investor in Cambodia, any slowdown will be difficult for the Kingdom as I am not seeing much evidence of economic diversification.
“Potentially, some projects may be affected. However, given Cambodia’s strategic importance with China’s Belt and Road Initiative, I believe that investments will continue,” Mr Ellender said.
According to an article in the South China Morning Post, China’s outbound direct investment (ODI) fell by 9.6 percent to 143.04 billion in 2018 as a result of the government crackdown on capital flight.
Ref: Property Report
