Condo sales up but glut looms in Phnom Penh

Condo sales up but glut looms in Phnom Penh

Two high-rise buildings are seen behind the central market in Phnom Penh. More condominium units were sold in the Cambodian capital in the first half of this year partly because young executives are starting to change their lifestyle. (Photo by Wanant Kerdchuen)
Two high-rise buildings are seen behind the central market in Phnom Penh. More condominium units were sold in the Cambodian capital in the first half of this year partly because young executives are starting to change their lifestyle. (Photo by Wanant Kerdchuen)

Some 13,730 condominium units were sold in Phnom Penh in the first half of this year compared to 13,050 units in the same period last year representing an approximate 5% increase in sales, according to figures from a real estate company.

According to a report from Century 21 Cambodia, 110 condominium projects were completed in the first half of the year in Phnom Penh, with 36,742 units in 148 buildings, the Khmer Times online reported.

Though the condominium market is currently seeing an oversupply of units, sales, however, were increasing at a rate of 27% annually, said the real estate company’s report.

Kuy Vat, chairman and CEO of Century 21 Cambodia, said that his company’s data could be useful for potential investors interested in the condominium sector in Phnom Penh.

“There are investment opportunities in the market. Though there is an oversupply, sales can increase if we think strategically,” he told the Khmer Times.

Vat, however, declined to go into the details of the glut in the condominium market but added the next three years will be crucial for the sector.

“I do not have clear information about the oversupply of units. What I can say is that in the next three years we have to strive very hard to attract more investors,” he said.

Chrek Soknim, deputy director of Vtrust Property, said research on the condominium sector in Phnom Penh would be extremely useful because many young executives are starting to change their lifestyles and moving away from their family homes to live in condominiums.

“We have to target these kinds of buyers,” said Soknim.

He pointed out that condominium developers often focused on buyers who just wanted to make a profit on the units after reselling them at a higher price and foreigners.

“We have to think outside the box to attract other kinds of buyers, too,” added Soknim.

Despite the data and experts talking up the positive outcomes of the condominium sector, according to recent figures from the Economy and Finance Ministry, the slowdown started this year and construction of new buildings will get progressively slower over the next five years.

The ministry gave a breakdown, indicating that this year will see a growth rate of 15% in the construction sector, compared to a growth rate of 19% last year. Next year, the construction sector will slow down to a growth rate of 12.4%. In 2018 it will decline to 10.3% and 2019 it will drop to 10%.

Investment in the construction sector reached a phenomenal $832.2 million last month, compared to $39.7 million the same period last year, according to government figures.

Do you like the content of this article?
COMMENT