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Logo of Phnom Penh Post newspaper Phnom Penh Post - Housing market improves in 2017

Housing market improves in 2017

Hoem Seiha, research director at VTrust Appraisal.
Hoem Seiha, research director at VTrust Appraisal. Photo supplied

Housing market improves in 2017

Safe, stable housing is a priority for everyone, and as Cambodia progresses economically, new generations of people are looking to buy their own homes and move their family from the lower class to the middle and upper classes.

Hoem Seiha, research director at VTrust Appraisal, said 2017 saw a slight increase in the number of new units created, based on pre-plan sales and construction.

On the housing market, there are four different types of homes: purpose-built shophouses, residential link-houses, semi-detached houses and single-detached houses. Condominiums are split into one-bedroom, two-bedroom, three-bedroom, four bedroom and penthouse units.

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“The number of new launches last year reached 12,500 housing units, while 2017 saw 14,000 new units spring up across the capital, showing an 11 percent increase year on year. This figure also does not mention other key cities,” he said. “Further, the market demand was also great in 2017.”

Based on historical data, Seiha told Post Property that sales of housing units in 2017 performed 27 percent better than they did in 2016. In 2017 an estimated 13,000 units were reportedly sold in the capital alone, and the number is even higher when taking the rest of the country into account.

For the rest of the country, 13,000 new units were sold in 2017. This figure covers Siem Reap, Banteay Meanchey, Battambang, Kampong Cham and Sihanoukville.

The supply, which is the number of housing units finished in 2017, reached 149,700 units, representing an increase of 27 percent from 2016.

According to the Housing Market report in 2017, the condo market only has 10,000 units available, whereas 2016 had a total capacity of 18,000 units. The study found that the total number of units under construction and completed is 60,500 units.

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As the demand for homes rises among the growing middle class, the low- and mid- priced housing supply has expanded to keep pace with market needs. Last year, developers offered an average of $94,450 per housing unit, but this year the average price fell to $63,390 per unit for the same type of home. This means that developers are more likely to aim at middle-income buyers rather than the high-end market they have been seeking for several years.

“The condo market is not quite as domestic as the living environment of the people, and the experience of the residents is also slowing down in neighboring countries. But there is still a market for foreigners. The sector can only grow if there is no land to be submerged,” he said.

Seiha added that both the supply and demand has increased this year. Easy, flexible payment methods have helped to stimulate the market’s growth as well.

“2018 is predicted to see a larger increase of new launches but a smaller completion rate, despite some tough political issues. Buyers’ confidence tends not to be affected by these issues as much as it did before, especially among middle-income groups,” he said.

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