Five condominium projects – two categorised as “mid-range” and three as “affordable” – were completed and ready for move-ins in the first quarter of this year, adding “more than 3,900” units to Phnom Penh’s supply, raising the total to about 48,600 units as of March 31, according to real estate firm CBRE Cambodia.

In a recent article entitled “Is there a Huge Demand for Condominiums in Cambodia?”, CBRE Cambodia had suggested that the capital’s condo supply closed 2022 at around 45,000 units, and projected that figure to rise to 65,000 by end-2023.

Additionally, two developments comprising over 1,300 units were announced for sale over the three-month period. These were the “J Tower 3” and Phase I of “Morgan Champs Elysees”.

The company, the local affiliate of US commercial real estate services and investment firm CBRE Group Inc, categorises condo projects as “high-range”, “mid-range” and “affordable”.

In its “Phnom Penh Market Insights Q1 2023” research report, CBRE Cambodia noted that the average per-sqm selling prices of condo units in January-March were $2,001 for “mid-range” and $1,371 for “affordable”, respectively declining by 0.4 per cent and 0.1 per cent quarter-on-quarter. The corresponding rate for “high-end” units remained flat at $2,609.

The report, published last week, said construction work on both new and existing projects has progressed more favourably in the first quarter of 2023 as the impact of Covid-19 tapered off. However, real estate transactions remain limited, it said.

Speaking to The Post on April 12, CBRE Cambodia valuation and advisory manager Chin Daluch explained that advances made on the aforementioned seven projects – which were either completed or put on the market – do not guarantee a material pick-up in condo prices or transactions. That, she said, would require at least another year.

She put the relative inactivity in the Cambodian condo market down to three main reasons: global economic uncertainty; a supply glut; and increased caution amid bank loan interest rate increases.

On the flip side, the two new projects launched for sale could signal investor optimism that the condo market is heading for a recovery, she opined.

Although the recent increases in foreign visitors to Cambodia have been a boon for the tourism industry, meaningful tailwinds for the real estate and construction sector will take longer to manifest, she argued.

“Trends will gradually improve, but a full comeback will remain elusive in 2023,” Daluch said.

The Ministry of Land Management, Urban Planning and Construction approved a total of 4,275 construction investment projects in 2022 – down 28 projects or 0.65 per cent from a year earlier – with total capital commitment of $2.968 billion, down 46.8 per cent on a yearly basis from $5.580 billion, according to the Ministry of Economy and Finance.

The housing segment represented 3,768 of the projects – up from 3,720 a year earlier – or an 88.14 per cent share of the total, up from 86.45 per cent in 2021, the finance ministry noted in its 2022 Socio-Economic Trends report, without providing the value of these developments.

In earlier Economic and Financial Statistics Bulletins, the ministry broke down the 2022 approvals by category: residential (3,768), commercial (228), industrial (184), public (58), tourism (36) and other (1). The corresponding 2021 figures were: residential (3,720), commercial (301), industrial (184), public (47), tourism (49) and other (2).