2019 real estate market in Cambodia has been growing due to high demand from both local and international buyers across different property types.
Will 2020 be more of the same? Industry insiders have mixed answers.
According to the Ministry of Land Management, Urban Planning and Construction (MLMUPC), there were 4,446 construction projects approved amounting to $9.3 billion as of August in 2019. By comparison, within the same period in 2018, government only approved 2,867 projects amounting to $5.2 billion – these projects being mostly high-rise buildings located in Phnom Penh and Sihanoukville.
Po Eav Kong, CEO of Advance Real Estate, expressed that property sector in Cambodia will grow in 2020 with some reservations due to recent events. He further explained due to government had doubled the approved projects; it will lead to a stronger construction activity in the following years.
Ping Serey, Vice president of Cambodian Valuers and Estate Agents Association (CVEA), saw a remarkable growth in residential and office space transactions. An increase from 10% to 15% in 2019. He urge government to provide better infrastructure such as roads, sewages and power lines to encourage private sector to build more affordable housing.
In terms of condominium development, Ros Sovantha, CEO of Estate Xchange, commented that purchase transactions still ongoing due to flexible payment options offer out and purchaser wanted to enjoy high rental yield in Cambodia.
He added that newly available condominium supply this year approx. 7,000 units but only less than 30% are owned by Cambodians. There is a possibility of surplus could be at the horizon and he hopes foreign investors, particularly the Chinese, would make up the difference.
Lack of public infrastructure is the bottleneck to Cambodia’s growth in real estate market. While government projects are underway, they cannot keep-up with the market demand for commercial and residential projects to cater for a proper access of sewage, electricity, and roads. A few developers have reportedly opted to construct their own roads.