Although the housing market’s currently experiencing a slowdown, Yin Leangkong – editor in chief of the magazine Property View and presenter and editor of real estate and economics at the BTV – said that developers should keep investing intelligently in the housing sector.
He suggests that intelligent investment means developers should divert their development capital to meet the customers’ needs by targeting affordability for the middle-class and lower middle-class families. After all, these lower income brackets are where the majority of the Cambodian population are currently classed.
In practice, some developers are also using some new strategies in the market to counter the sudden decline and appeal to the lower end of the market. Buying Boreys usually required customers to deposit in advance, but the new strategy used by many developers to stimulate sales allows the customer to pay monthly installments - even after the construction is complete - in order for them to buy their desired house.
He says this is good for investors and also makes it easier for buyers because they do not need an initial deposit anymore. However, Leangkong warns that "long-term payment from 10 to 20 years means customers have to spend more money than pay cash one time. So, customers need to consider what options would suit their desired outcome seriously.”
A report of the Ministry of Land Management, Urban Planning and Construction show that citizens need around 10,000 residential units per year. This was from data gathered where 2014 was met with an insufficient supply and in 2015, there was almost enough units to meet the demand. In 2016, however, the supply seemed to have met the market demand for the year.
Leangkong explains that in 2016, the high-medium and high-class citizens have already bought residential homes. Thus, the housing market for these people is already enough. As a result, a number of projects were brought to a halt and the construction sector started slowing down.
Leangkong continues that investors will find success in affordable housing for the middle-class and lower middle class as there are more people in these classes and because it will be addressing a visual demand. The bestselling homes still range from $30,000 to $50,000.
And according to a Ministry of Finance and Economy report, real estate development shifted from both middle-high and high standard of living to middle and lower middle class to meet with most people's needs. For example, Okhna Sear Rithy’s project is underway to develop an affordable housing project near Phnom Penh.
In conclusion, Leangkong urged all the developers to consider selling affordable properties to people to help reduce a social dilemma, to strengthen the economy, and to help the whole country progress towards civilization and modernization.