As of earlier this week (13th June 2016), we can confirm that Khan Daun Penh will not continue the processing of soft titles under a foreigner’s name. Khan Daun Penh, or Daun Penh District, is a commercial hub of Phnom Penh marked by Phsar Thom Thmei with its unique art deco architecture and several major roads which emanate from and pass near the market.

As our clients would know, foreigners are technically only able to purchase properties above ground in a property that is co-owned (strata titled). The townhouse flats in Riverside are not strata-titled and hence a grey area in the law when transferred into a foreigner.

As far as we understand, all throughout Phnom Penh now, foreigners can only own condominiums as stipulated in the law and not soft titled flats. The purchase of townhouse flats for foreigners can only be done through a nominee or company structure.

What happens from here?

Likely nothing much.  If Khan Daun Penh follows the precedence of Khan Prampi Makara which did allow foreigners to purchase soft titled flats in previous years, foreigners who have properties under their name are not under any pressure to sell. They can still live in the property or rent it as normal, just when they do eventually sell, it has to be in the name of a Khmer national.

Very worst case scenario is that authorities will force you to sell the property, though if this happens, you can just transfer the property into a dedicated nominee’s name with lawyers.

Property prices in the future?

We would predict slower sales numbers following the news until the law is accepted by the mass, then the market will sort itself back to normal. Currently (previously), 20-25% of our clients purchase flats through a nominee structure – will simply have to increase this number to 100%.

Rental prices may increase in the future. With many renovation teams potentially out of the game, the future supply of quality western renovated flats will slow down, though, demand should continue to grow.

Time to stress?

Given the worst case scenario is to transfer the property into a nominee’s name if the authorities really push it, there’s really not too much to stress about… unless you own a real estate agency… specializing in servicing foreigners…