With the rate of condominium market demand and supply fluctuating in Cambodia, it is possible that 2016 will force real estate professionals to focus on a few issues that need to be addressed for the condominium market to be sustainable into the future.
Particularly, there is an increasing need to develop new strategies to combat the decreasing demand for condominium units. This is according to Chrek Soknim, Century 21 Mekong ceo, during his presentation for Century21 Cambodia’s Condominium Market Report H1 2016 report.
As Official Property Portal Partner of Century21 Cambodia, the Realestate.com.khTV team was there to catch the news as it happened.
There have been many laws that have been drafted and approved throughout the years to assist in the growth of the real estate sector, especially in terms of the condominium market. But when there is any signs of insecurity in the market or political sphere in Cambodia, foreign investors are put off and look to more established and less vulnerable markets with their investment. Soknim says that minor political disputes in 2016 are making foreign investors nervous when considering Cambodia.
But Soknim states that this may be more of a national image issue than it is an actual reality of Cambodia in 2016.
He explains, “even though the political situation in Cambodia looks stable and nothing changes, the confidence and sentiment of buyers has decreased in some respects. This may seem like a small issue to some people, but foreign investment in the industry makes up about 70 percent of the condominium market.”
Due to projections pointing towards an increase in demand during the early months of 2016, many developers took the opportunity to apply to build new projects, especially in the condominium market. Unfortunately, this led to more new construction that the market may have anticipated.
Soknim said, “Supply has increased dramatically this year —especially in January, February and March of 2016—with new projects being launched almost every day.”
Century21’s Condominium market report indicates that 13,730 more units are expected to come up in the next few months of 2016.
However, Seraj Sutton from Century21 Cambodia, at the same event, stated that he hopes to resolve increased supply by communicating with foreign investors by means of a “Global Strategy Business Development” tour, which will allow Century21 Cambodia to move from one country to another and keep investors informed about the opportunities in Cambodian real estate.
A slowing down of the economies of neighboring countries such as China is also contributing to the amount of demand the Cambodia condominium market is receiving. Soknim clarifies that even if Cambodia still has lower rental and sales prices across the market, Cambodia has to lessen its dependence on overseas money. Cambodia is a dollar-dominant market and this may cause issues as well in the future.
Despite some indications of an oversupply, Soknim and the rest of the Century21 Cambodia team believes that with a cautious mindset, and proactive investment policies, there is still much success to come in the Cambodian condominium market.