Q: As 2018 begins, what do you believe was the defining theme of the 2017 real estate market in Cambodia?
Oknha Cheng Kheng
Chairman, Cambodia Properties Limited (CPL)
In the course of 2017, buying and selling operations were relatively strong in terms of plot land, boreys and condominiums. Land price was also higher compared to that of previous years. The potential in 2017 was not only in Phnom Penh but also in Sihanoukville, with strong competition due to many Chinese investors.
This comes as a result of Cambodia’s incentivizing investment law, proposed infrastructure initiatives - such as the highway between Phnom Penh and Sihanoukville, deep sea port and growing tourism potential.
With regards to living trends, condominiums have become popular as many Cambodians start to embrace quality lifestyle and convenience.
Ann Sothida
Director, CBRE Cambodia
Land prices throughout Phnom Penh grew by 6.6%, with the most noticeable increases in the north of the city & second CBD (such as Toul Kork & Sen Sok), whilst there was only modest growth in the traditional CBD (such as Daun Penh & Chamkarmon). Occupancy ranked at the high level of 80% or higher across a number of sectors including office, retail & residential. Sihanoukville received an influx of investment in the construction and real estate market, dominated by Chinese developers building resorts, hotels, condominiums and casinos.
Dr. Kim Heang
President, Cambodian Valuers and Estate Agents Association (CVEA)
2017 was the year of affordable homes and plot lands. Developers launched a lot of projects in response to high demand for low-cost housing priced between $30,000 and $40,000 targeted at lower-middle income families. This market represents a majority of the population.
With regards to condos, the number of projects launched was lower compared to the previous years. In contrast, the demand of warehouse for rent, especially for import and export products, was high.
Apart from the rising number of low-cost housing projects, there was also a high demand among investors for plot lands in the suburbs of Phnom Penh. There were lesser demand among investors for plot lands in central Phnom Penh, with many of them already bought by developers.
Oknha Sear Rithy
Chairman, WorldBridge Group
In 2017, the real estate market was strong, with many new development projects started, including “The Palm” project. Many condominium and borey projects were also built.
While demand for new projects stagnated in some respects because of location problems, both condo and borey developers were able to adapt to the needs of the local market, moving from high-end projects to the more affordable projects in local residential areas.
Plot land sales also showed strength in 2017, with an increase in demand and more plot land projects underway.
Q: Looking Forward: What is your prediction for the key strengths and weaknesses of the Cambodia real estate market over the course of 2018?
Oknha Cheng Kheng
Chairman, Cambodia Properties Limited (CPL)
The buying and selling of land will work normally as in 2017, and land prices will not decrease in 2018. I believe projects such as Golden 42, which was delayed for many years, will re-start in 2018 and this will be a good sign for the real estate market.
When it comes to concerns regarding the 2018 election, I believe that proper guidance from experts will ensure that investors will not be affected - whether there is an election or not.
If Phnom Penh continues to develop according to its Master Plan, then everything will be fine. Now is the right time to expand the Master Plan. The Government should introduce new infrastructure initiatives that will be good for the business and tourism sectors, though development could also mean higher prices for land and other real estate.
Dr. Kim Heang
President, Cambodian Valuers and Estate Agents Association (CVEA)
There will be lesser number of real estate transactions this year compared to the previous years. I advise that those who have a lot of cash should buy real estate this year as there would be lots of real property for sale in 2018. This will mean more supply and cheaper prices that buyers can take advantage of. The opposite happened in the past few years where high demand drove the price of real estate up.
In 2020, however, I believe that the real estate market will grow again. I am convinced that politics will remain stable and will not impact the real estate industry. Those buying this year can sell for a handsome profit in the next few years. I suggest that buyers, as much as possible, should refrain from borrowing money from banks to finance real estate investments.
Oknha Sear Rithy
Chairman, WorldBridge group
With regards to the real estate market, there may be some hesitation from buyers because Cambodians are often hesitant to invest in property when the national election comes.
However, I believe the upcoming election will not affect the real estate market. But people will still wait to see what happens with the market. I believe that after the election they will be optimistic in purchasing property again.
For the time being, let us continue to welcome foreign investors, particularly Chinese investors who have invested heavily in the Kingdom’s real property market. From what I have seen, the Chinese are not concerned about the election. I believe that Chinese investments will continue to flow and Chinese buyers will continue to purchase property here.
In addition to the Chinese, I believe that other foreign and local investors will also put their money in residential and commercial properties such as office space and malls. To cap it all, I believe the Cambodia real estate sector will continue to move forward.
Ann Sothida
Director, CBRE Cambodia
Occupancy levels and demand will remain strong within the retail & office sector (centrally owned building). Land prices in the CBD will be stable with little growth expected, mainly due to the slowdown of speculative high rise residential developments. Land prices in the outskirts of the city will increase due to improved infrastructure (road & bridge) making peripheral locations more accessible and attractive for development. With the announcement of new airport to be built in the south of the city, we expect to see an increased demand from speculative investors for development land close to this project, thus driving up the price of land in the south of the city.
A number of strata-title offices will be delivered to the market, we are skeptical about how these buildings will be managed. The ownership structure may cause concern of those tenants whom requirement large portions or entire buildings. There will be an additional 13,000 condominium units brought to the market in 2018, we expect this will have an effect on investment yields as there will be more supply and competition in the market.
Check out the latest property for sale in Cambodia or property for rent in Cambodia or read the The Ultimate Guide To Cambodia by Realestate.com.kh
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