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Phnom Penh condo market loses steam

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More than 1,000 new condo units were put up for sale in the capital last year. Hong Menea

Phnom Penh condo market loses steam

Just four new condominiums were launched for sale last year in the capital, down from 17 in 2020, according to research by CBRE Cambodia.

The four developments comprised “more than 1,000” units, while the 17 in 2020 consisted of 10,866, the real estate firm reported.

CBRE Cambodia categorises condos as “high-range”, “mid-range” and “affordable”.

It said the average per-sqm prices of condo units trended down in 2021, at $2,700 for “high-end”, $2,000 for “mid-range” and $1,400 for “affordable”, or down from their respective end-2020 rates of $3,000, $2,250 and $1,500.

Rental rates at end-2021 were down by about 10 per cent year-on-year, falling in the $7-12 range.

CBRE Cambodia estimates that 22 projects comprising 13,000 units will be completed and offered for sale this year.

Kim Kinkesa, senior manager of research and consulting at CBRE Cambodia, told The Post on January 26 that the Covid-19 crisis had stifled a recovery in real estate transactions, and that border restrictions and other pandemic-related concerns had warded off a substantial number of potential customers, especially foreigners.

“Even though each country now seems to be easing travel restrictions, the Cambodian condo market still needs a long time to recover.

“Because the current condominium market in Cambodia – especially the high-end segment – relies on foreign customers, it will take a long time for it to improve,” she said.

CBRE Cambodia notes that the condo sector is witnessing a slowdown in launches and take-up rates, which it says is an indication of where developer sentiment and demand lie.

As the condominium market is heavily overseas sales driven, it is likely that challenges will persist until travel corridors reopen and the economic impact of Covid-19 dissipates, it said.

In 2021, a total of 4,303 new construction projects were approved nationwide, with cumulative registered capital investment of $5,333,798,525 – down by 31.21 per cent year-on-year – and total floor area of 12,998,072sqm, Ministry of Land Management, Urban Planning and Construction data shows.

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