Condominium sales have seen a decline in the first half of 2015, despite the rise of supply in the market. Due to the high rate of competition in the market, the demand for condominiums is currently being met, a recent study says.
Hun Bunna Realty Group conducted research within the 12 districts of Phnom Penh, which showed that condo sales have decreased from 75 per cent to 70 per cent in the first half of this year. The decrease showed a correlation between the rising supply of condos due to the increased competition.
Moreover, as Post Property reported earlier this month, research also showed that in the first six months of this year, 16 condo projects were selling in the market while 39 more are under construction, planning to enter the market, increasing the supply of condos to 14,000 units in the next three to four years. The condo supply will be increasing to the top point in the market while investors expect to gain more benefits after the ASEAN Economy Integration at the end of this year.
The research conducted by Hun Bunna Realty group focused on Khan chamkamon, 7 Makara, Sensok and Toul Kork, which have the highest condo supply in Phnom Penh. The condos located in the center of the city cost about $1,200 to $3,500 per square metre, whereas condos located in the outskirts of the city cost $800 to $1200.
Hin Socheat, Research Director of Hun Bunna Reality Group, said that although condo supply is increasing, condo investment in Cambodia will still expect a profit 9 per cent return, higher than Malaysia’s 5 per cent and Singapore and China’s 2.7 per cent.
Ann Sothida, associate director of CBRE Cambodia agreed that the number of condos sales has decreased this year largely due to the increase of competition in the market. In addition to investors being concerned about the uneven supply and demand, another reason why sales have decreased is because many local customers prefer villas over condos.
“They don’t want to spend money on services such as parking lots, security, steam and saunas or hygiene to make their lives better, and they don’t see why they should pay for these things. Although condos don’t have those services for free, it doesn’t help to increase the number of condos sales or to make people want to live in condos,” she said.