Experts still optimistic about real estate
Despite growing property concerns in Cambodia, some real estate experts are remaining optimistic in the face of recent downbeat commentary.
Oknha Noun Rithy, CEO and president of Khmer Foundation Appraisals, said on the phone to Post Property earlier this week that he always has a different opinion when it comes to the real estate market in Cambodia because he has faith in the Kingdom’s strong economic growth and political stability, which underpins investor interest in property. When asked if the current political situation in Cambodia was really stable, Rithy said, “The current political situation in Cambodia is no different from a car driving on a big road, except that the road is dusty. I think it won’t be a problem for Cambodia’s real estate market.” He added, “I believe that Prime Minister Hun Sen is intelligent enough to manage this situation easily.”
“Investors from Hong Kong and Taiwan are attracted to invest in the [real estate] industry in Cambodia,” Rithy added.
“Especially with the increase of commercial activities in the Kingdom, there are more shopping malls to satisfy the growing market demand.”
He added, “Even if the growth of condo purchasing is slowing down, construction is still continuing actively. Purchasers will wait for the completion of those condo developments, and it’s not a sign for worry.”
In light of growing supply in Phnom Penh’s property market, Rithy urged all potential condo investors to think about location, time, and value.
“That means they have to conduct market research and react to market needs,” he said.
“They shouldn’t aim for too much profit. They should make it affordable, for the good of everybody.”
Alexander Evengroen, chief advisor at the Cambodian Valuers and Estate Agents Association, said he thinks the need for real estate in Cambodia will remain strong in the future because of the country’s favourable demographics.
“There is a big opportunity for this sector as there are many young people in Cambodia,” he said.
He continued, “The answer is simple and optimistic because 70 per cent of the total population are under 34 years old. They will have families, and they will need new houses.”
Sear Chailin, CEO of CL Realty, said purchasing activities have stayed the same, though it is slowing down because clients have already paid a lot for the sector. Second, real estate prices have now peaked, and this creates hesitation in investors. Lastly, some real estate purchasers also invest in some other sectors.
While Chailin said the condo market is susceptible to fundamental supply and demand fluctuations, he said this is only temporary.
“It’s not a long-term issue because Cambodia is in need of such high buildings since there are many people living together,” he said.
“When there are many people living together, commercial activities will increase.”
On the opposite end of the spectrum, some local investors are already feeling the pinch of increasing condo supply coupled with stagnate demand.
Tuy Bun, investor of Residence L Cambodia, which comprises five mid-range condo buildings in Phnom Penh for the lower and middle income class, said sales of the condo projects had been trending downwards which had led to some issues for the company.
However, he said the project’s completion timetable remains on track, with the first and third condo projects already finished.
He continued, “I hope the market will rise again. It won’t stay down forever because our economy is still growing, and the Kingdom is still politically stable.”
Bun said his condo costs from $1,000 to $1,100 per square metre, claiming they are affordable for locals given they make up 80 per cent of his client base.
CL Realty’s Chailin added, “I don’t think there is a long-term risk in this sector because there’s a saying: ‘People increase. Land doesn’t increase.’”