Investors shift interest to properties outside Phnom Penh
Investors shift interest to properties outside Phnom Penh
By Eric Wong Chon Lap
In Phnom Penh, developers have been focusing on launching new housing and condominiums over the past years. So far, there are over 15,000 units in the city from condominium developments launched between 2016 and 2018.
One major challenge faced by the housing and condominium markets is that the cost of investment has increased along with the hike in land prices in Phnom Penh, leading to the escalation of asking prices. Most of the buyers in the luxury residential market are foreigners who have recently made purchases for long-term investment purposes rather than for short-term investment or own-living. Meanwhile, more than half of the purchasers of residential properties priced above US$70,000 are foreigners.
As many residential developers concentrate on building projects within Phnom Penh, the new supply of properties in places such as Kampot, Kep, Siem Reap and Poipet have decreased. Therefore, there has been pent-up demand as there are fewer new developments being launched in these cities. Because of this, demand for housing has been growing steadily for properties located in major cities and towns outside the capital city of Phnom Penh since the beginning of the year, and buyers in this segment are ready to make purchases for own-use or long-term investment purposes.
In addition, prices are considerably lower for properties outside Phnom Penh and buyer response and sales performance have been positive for launched or completed middle to lower end developments. Some good examples include the Palm Residence in Poipet and the recently launched twin tower by Thai Boon Roong Group in Kampot, which achieved an average price per square metre of US$1,500 to US$2,000, respectively. Both developments saw impressive sales performances.
The gaming industry on the other hand is believed to be one of the main reasons that drew both real estate investors and tourists from mainland China to Cambodia over the past few years to places where the industry was booming such as Bavet and Poipet. The government’s recent ban on online gambling has impacted on the country’s real estate sector. In general, this ban will help to stabilise the real estate sector through a correction of property prices and long-term investments to the country. However, the current ban does not affect properties local buyers purchase for own-use.
For developments launched outside Phnom Penh since 2018, their impressive sales performances proves that demand is still strong for properties purchased for own-use in major cities that have the potential for value appreciation in the future, backed by being in sought-after locations and of course, built by reputable well-known developers in the market.
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Source: construction property news