Cambodia’s construction sector still buoyant despite the detrimental effects of the COVID-19 pandemic
While many sectors globally are facing a serious downturn in their fortunes due to the knock-on effects of COVID-19, Cambodia’s construction industry remains stable, according to the Ministry of Land Management, Urban Planning and Construction.
In fact, in a positive piece of news amongst the current gloomy outlook, Seng Lot, spokesperson for the ministry claims construction projects are on the rise in the country.
“As far as I’ve heard from some economic analysts, they are projecting a 50 percent reduction in global economic growth this year. But construction projects here in Cambodia haven’t felt a hit as yet, though,” Seng said.
“More than 500 construction projects applied for permits
permits with the ministry as of the end of February this year. In comparison, in the same time period in 2019, only 300 applications were pending. So it would suggest the industry isn’t being negatively impacted,” he added.
While Seng failed to disclose the exact amount of financial investment these projects – if approved – will represent, he did say that the top-three investors are China, followed by Korea and Japan.
In further good news for the industry, despite reported cases of COVID-19 rising to 12 as of yesterday, there has been no postponement of major construction projects as yet.
The sector has enjoyed an impressive growth curve in recent years. According to official figures from MLMUPC, investment ran to around $11 billion in 2019, an increase of nearly 90 per cent on 2018’s amount of $5.5 billion.
Kim Heang, regional operating principal of the US-based real estate firm Keller William Cambodia, said the effects of the COVID-19 outbreak could provide a golden opportunity for savvy construction companies.
“The price of construction materials and construction labour is going down, while at the same time, registered developers are also benefitting from a four-percent stamp tax exemption from the government,” said Heang, who also owns a housing project, KS Residence, in Kandal province.
Kim was referring to the recent decision taken by the government to remove a four percent stamp tax for residential properties worth less than $70,000 within a year, from February to January 2021, in a bid to ease the financial effects of COVID-19.