Cambodia’s Real Estate Market 2021 and Outlook 2022
Following the large-scale Covid-19 outbreaks in Cambodia in 2020 and 2021, real estate sector is among the most vulnerable and the industry continues to be hard hit by the pandemic until now. However, the government of Cambodia reopened the country in November this year to ease the impact, hoping foreign investors will come back to invest and make this sector prosper again.
Ms. Tang Hour, CEO of Amatak Property Service, said after the spread of the Covid-19 pandemic in Cambodia in 2020 and 2021, real estate sector showed the sign of slow sale in almost every property type, especially high-end condo which is heavily reliant on foreign buyers.
However, land property and affordable housing priced between $50,000 and $80,000 still performed well during bad time because developers target the majority of local buyers who are in need of properties of this type, she added.
With almost Cambodian people fully vaccinated and the country’s reopening, Ms. Tang Hour believes that land property and affordable housing will continue to perform well in 2022 and beyond, mostly thanks to developers’ cooperation with banks to offer flexible payment term and longer payment period to local buyers. Besides, affordable condo project priced between $50,000 and 100,000 will also have a high chance of success in 2022.
Meanwhile, Mr. Ear Chariya, CEO of AP Real Estate, said, in 2020 and 2021 speculators who bought land and hope to resell it for a profit are hit hardest by the adverse impact of the Covid-19 pandemic because we cannot predict when the economy and real estate sector returns to the pre-crisis period.
The future remains uncertain, depending on how the Covid-19 situation in Cambodia and throughout the world will be better or not. If the situation is better, foreigner investors might return and condo sector is likely to see more sales, he added.
In 2022, he is convinced that housing market in the outskirt of Phnom Penh will be in high demand owing to the city expansion along with infrastructure development, especially National Road and Ring Road. In the future, most low and middle-income family cannot afford to buy expensive housing in the city center anymore.
In an interview with local media Construction & Property, President of KW Cambodia Dr Kim Heang, did not expect the market will recover to the 2019 level yet. Dr Kim Heang said that 2022 and beyond whether or not the market will recover depends on three key factors with uncertainty remaining.
”There is no certainty at all for the future. The country reopening is a good sign. However, if foreign investors, which is the first key factor, do not return, the market will remain stagnant as it is now, given the small scale of the domestic market.” ”I don’t expect much from 2022. I don’t expect new investors to come. Just make the existing ones who left during the pandemic returning is already the best we can do.”
Besides foreign investors, two other sources of capital that will help jump-start the real market are the wealthy overseas Khmer and local tycoons.
”In a hard time like this, I wish wealthy Khmer living abroad would consider injecting capital in Cambodia. If they do so, the market will see a big improvement next year as there will be domestic cash flow,” said Dr Heang.
”Meanwhile, rich locals should also continue to invest further to keep the market going. Thanks to the local development, real estate sub-sectors such as land and boreys have been doing fine even during the pandemic,” he added.
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