Government revenue collected on property transfers and construction services dropped off by 25 percent last year, reflecting a slowdown of the Kingdom’s construction sector despite a surge in the reported value of investment in real estate development projects, according to analysts.

Data released yesterday by the Ministry of Land Management, Urban Planning and Construction (MLMUPC) show revenue collected by the ministry fell to $72 million last year, from $90 million in 2015. The 25 percent decline in revenue stood in stark contrast to the total value of approved investments in construction and real estate, which soared 155 percent to $8.53 billion last year, from $3.3 billion in 2015.

Ly Chhuong, vice president of the Cambodia Constructors Association (CCA), said the ministry’s revenue figure was a bellwether of the construction industry, and a far more reliable indicator of its performance than tallying approved investments.

“The revenue collection figure reflects real construction activity,” he said. “In fact, real construction activity in 2016 was not as strong as in 2015.”

According to the ministry’s report, about 85 percent of the $72 million in revenue it collected last year was as tax on property transfers. The remainder was from various construction services.

The MLMUPC report showed the total number of approved construction projects increased last year to 2,636, from 2,305 in 2015.

The report did not break down the projects by their type or investors, and the ministry’s spokesman could not be reached for comment yesterday. However, a ministry official recently told the Post that most project approvals involved condominiums, apartments, hotels, office buildings, borey units and commercial centres.

Kim Heang, president of the Cambodian Valuers and Estate Agents Association (CVEA), was also unimpressed by the reported surge in investment in the construction sector. He said that 2016 clearly saw a slowdown in construction activity, and he cast doubt on the investment figure.

“It would be great if the $8.5 billion was a real reflection of activity in the construction sector, but I doubt the actual amount is that high,” he said. “The recorded value is huge, but the actual value is not that much.”

Heang explained that the investment figure was merely a number scrawled into the ministry’s books when developers register their projects. However, it was no guarantee of the actual capital invested into a project.

He said dozens of ambitious property development projects were declared last year that were unlikely to ever come to fruition.

At the same time their multi-billion price tags were unrealistic, given that huge and very real large-scale projects such as The Bridge and Aeon Mall 2 were only priced in the millions.