Logo of Phnom Penh Post newspaper Phnom Penh Post - Only three condos finished in Jan-Mar as market sputters



Only three condos finished in Jan-Mar as market sputters

Content image - Phnom Penh Post
The Picasso City Garden, along with M Residence and The Peninsula Private Residences, were the three Phnom Penh condos completed in the first quarter of this year, according to CBRE Cambodia. PICASSO CITY GARDEN VIA FACEBOOK

Only three condos finished in Jan-Mar as market sputters

Three new condominiums were completed and ready for move-ins in the first quarter of 2022, adding 700 units to bring the capital’s condo supply to about 33,800, as rental and sale prices of high-end units extended a decline seen in October-December 2021, according to a prominent real estate firm.

In the period from January-March, there was a complete lack of new groundbreaking and sales announcements from the condo segment, with the Phnom Penh market registering a “steady decline” since end-2019, CBRE Cambodia said in a research report.

The report revealed that per-sqm condo sales prices in the first quarter for high-end and mid-tier units averaged $2,600 and $2,000, respectively, falling by 4.1 per cent and 0.3 per cent quarter-on-quarter. However, the corresponding rates for affordable units – mostly snatched up by Cambodians – averaged $1,400, up by 1.6 per cent on a quarterly basis.

On the rental front, the average monthly per-sqm price for high-end units dropped by four per cent on-quarter to $10.70, whereas the analogous rates for mid-tier and affordable ones inched up by 1.1 per cent and 1.4 per cent, respectively, to $9.20 and $7.80.

CBRE Cambodia said that Covid-19 pandemic-driven cross-border travel restrictions had a “significant impact” on the Kingdom’s condo market – especially on developments that target foreign customers – with many projects facing major delays.

The real estate firm estimated that more than 13,000 condo units would be completed this year.

It listed the three projects completed in the first quarter of 2022 as the high-end Picasso City Garden and M Residence in Boeung Keng Kang district, and the mid-range The Peninsula Private Residences in Chroy Changvar district.

Kim Kinkesa, senior manager of research and consulting at CBRE Cambodia, told The Post on May 4 that although Cambodia and other regional countries have reopened “almost 100 per cent”, condo prices will not recover immediately.

She said prices are more likely to “improve somewhat” from the beginning of 2023, and added that the number of projects announced for sale this year will be limited, reasoning that the market requires more time for vacancy rates to drop.

“I believe condo prices will continue to fall further, in a trend that may last until the end of 2022,” Kinkesa said.

Global Real Estate Association president and Sam SN Realty CEO Sam Soknoeun said that the Cambodian condo market is “not recovering well at the moment”, noting that residents of the units most commonly tend to be foreigners, numbers of which have dropped dramatically in the Kingdom during the Covid-19 crisis, whether as tourists, investors or workers.

He said the decline in number of foreigners has not only catalysed a reduction in condo prices and occupancy rates, but led to stagnation in the construction sector and a dearth of sales announcements for new condos.

He stressed that the slump could prolong, especially for foreign-focused projects. “Most condo projects highly relied on foreign customers, so without foreigners coming in, things will be quieter and cheaper,” he said, echoing Kinkesa’s view that the market still needs more time to recover.

For reference, the government approved 652 investment projects in the first two months of 2022, down from 859 in the year-ago period, with total registered capital of $137 million, marking an 88.9 per cent plunge year-on-year, according to the Ministry of Economy and Finance.

MOST VIEWED

  • Siem Reap drain canal now ‘mangrove’ promenade

    A more than half a kilometre long stretch of canal in Siem Reap has been covered and turned into a promenade to attract visitors, said Ly Rasmey, secretary of state at the Ministry of Land Management, Urban Planning and Construction, on September 16. The new pedestrianised

  • Angkor wildlife, aquarium park still to open October

    The Angkor Wildlife and Aquarium complex about 30km southeast of Siem Reap town with initial total investment of more than $70 million is reportedly still on track for an end-October opening. The park is located on a 100ha plot along National Road 6 in Kbon village, Khchas

  • Final verdicts for Khmer Rouge leaders ‘vital’ for next generation

    Nearly a decade after the commencement of Case 002/02 against Khieu Samphan back in 2014, the Extraordinary Chambers in the Courts of Cambodia (ECCC) is now set to deliver its final verdict for the former Khmer Rouge head of state. The Supreme Court Chamber of the ECCC,

  • Typhoon Noru brings flash floods – 16 dead

    An official warned that that the 16th typhoon of the season, Noru, had brought heavy rains to areas the Mekong River and flooded thousands of homes in the provinces bordering Thailand. As of September 27, the death toll from the flooding had risen to 16. National Committee

  • Defence minister reaffirms Kingdom’s staunch support for One-China policy

    Minister of National Defence General Tea Banh has reaffirmed Cambodia’s unwavering support for the One-China policy. Tea Banh was speaking at the September 20 ceremonial handover of 117 vehicles and other military equipment donated by China’s defence ministry, held at Phnom Chumreay International Military Training

  • Deaths due to ‘lifestyle’ diseases rise in Kingdom

    The Ministry of Health has called on people to pay closer attention to their health to protect themselves from non-communicable diseases (NCDs) which it said have caused high rates of deaths in the country. Ministry secretary of state York Sambath made the call at a