Figures released by the National Valuers Association of Cambodia show rental rates are down – but agents say the actual decline is more dramatic
Rentals are dropping on apartments in Phnom Penh amid low demand and high vacancies.
Rentals have fallen on top-end residential units in Phnom Penh following a decline in the number of home seekers.
Meanwhile, new vacancies increased in the fallout from the depressed global economy, apartment owners and agents say.
Kong Vannsophy, assistant to the CEO of Cambodian Priority Property Investment Co, said apartments that his company was asking just $2,500 per month for now were renting for $3,200 early last year, while average villa prices had dropped from $3,500 a month to $3,000, including furnishings, water, electricity and security.
"There are a lot of apartments to rent now because no new investors are coming and many have left," he said.
"Cambodia's business environment is now too unstable."
But with few new investors setting up in Cambodia, lower rentals were not necessarily helping landlords find tenants in what has rapidly become a renters' market.
Visal Real Estate Director Sear Chilin said his company had 50 apartments and 40 villas available for rent in prime locations around Phnom Penh.
"The owners of apartments call me every day asking, ‘What is going on with my apartment now, do you have clients to rent my apartment yet?'," he said.
Some clients had dropped their asking rentals for villas by as much as $1,000 from the $2,500 asked for before the global economic crisis began derailing the local economy last year, he said.
Moung Sitha, the owner of a three-bedroom furnished apartment on Street 310 in Chamkarmorn commune, said slashing his rental price had not helped him find tenants.
"Potential tenants said the asking price of $2,500 a month was too expensive - so I reduced my rental to $1,700, but still nobody has taken the place," he said.
He said he had decided to look for tenants himself as real estate agents had set the price higher than he believed was realistic for the market.
Numbers released by the National Valuers Association of Cambodia at a conference in Vietnam in late April also show rentals are down, although not by as much as agents spoken to the Post are claiming.
The association said rentals were down around 15 percent in the first quarter of 2009 compared to a year earlier.
Rentals began decreasing in the second half of 2008 after increasing between 25 and 30 percent from 2005 until the beginning of 2008, its figures showed.
Valuers Association President Sung Bonna told Prime Location average rentals on a three-bedroom apartment in the central city were US$2,500 per month on average over the first three months of 2008 but dropped to between $2,000 and $2,200 per month over the same period this year.
In Boeung Keng Kang I district, apartment rentals had dropped to between $1,600 and $2,000 per month from as much as $2,500 last year.
"Because of the impact of the global financial crisis, rentals for apartments, villas and flat have dropped, just as rentals for commercial premises have dropped," Sung Bonna said.
Landlord Por Em said he refused to drop the rent further on an apartment after already dropping the price from $1,500 last year to only $1,200 a month now.
"Renters want me to discount the price in the same way that rentals on other apartments in Phnom Penh have decreased, but I refused so they have all gone to look for another place," he said.