Condo market continues to grow despite over-supply

Condo market continues to grow despite over-supply

New projects involving 20 condo complexes are continuing to be built despite an already narrow market sector and a future surplus of condos in the Kingdom.

According to research on the condo market by Bunna Reality Group in first half of this year, Phnom Penh now has a total of 30 condo projects, 10 of them already built. Together, these total 24,000 units, with between 60 and 70 per cent already sold.

Another 20 condo projects are under way and in the construction faze, totalling about 4,000 units.

The research study noted, “Currently, in terms of the local market, the supply of condos is already surplus to the city’s needs. However, projects are on sale abroad. Investors expect the condos to be in suplus as Cambodia will have to integrate with other ASEAN countries in 2015.”

Condos under construction in Tuol Kork district.
Condos under construction in Tuol Kork district. SRENG MENG SRUN

The report also shows that by the end of 2013 and in early 2014, many condo projects will be completed, adding further supply to Cambodia’s market.

Kuy Vat, president & CEO of Vtrust Group, said that because Cambodia is in a certain stage of development, it remains in need of condos. But the success of these projects depends on the locations, like BKK1, where there is a high demand for quality condos.

That need has prompted a variety of fresh construction projects. Kuy Vat added that after the election, the property market has been quiet and that many investors had returned to their provinces.

“Condos in major locations still remain much in need but on the outskirts of the city there has not been much demand. The market for this is only good in locations in urban areas which are completely full.”

Owen William, a property evaluator for CBRE Company in Cambodia, said before the global crisis, there had not been great demand in the condo market in Cambodia, but this started improving last year.

“At present there are condo building projects aiming to supply for surplus need in the future, but this has not yet been a problem.”

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