Middle class locals the next target of condo developers
Middle class locals the next target of condo developers
Realtors consider average-priced condos as those costing from $30,000 to $50,000 per unit.
While the market for luxury condominiums aimed at the wealthy is nearing saturation point, developers are eyeing the burgeoning local middle class as the next big thing in property sales, according to realtors.
“I think developers that focus on average-income customers can be successful as local people are now able to afford them,” Ann Sothida, director of realtors CBRE Cambodia, told Post Property. “There is definitely a trend developing.”
The middle class in Cambodia is loosely defined as a household earning from $500 to $2,000 a month. In the past, families attaining this status would likely think about buying land or property near their ancestral homes, but now even first-time buyers are considering moving into so-called average-priced condominiums.
Realtors consider average-priced condos as those costing from $30,000 to $50,000 per unit.
Sothida said this year alone has seen three such condo projects come online, with a total of 2,000 units.
Developers are aiming their product at buyers like Narith, who recently bought a unit in a condo in Boeung Trobek commune as a second home.
“I think more Cambodians are choosing to live in condos because some of my friends have also bought into the lifestyle,” he said. “Living in a condo will definitely be different from living on the ground floor. It will be a new experience.”
Kim Heang, president of the Cambodian Valuers and Estate Agents Association, said condos aimed at the middle class were a bargain compared to landed property – particularly in the Chamkarmon and Daun Penh districts.
“If condos in these areas are built from 15 to 25 floors and priced from $800 to $1,200 per square metre, they will be successful,” he said. “For that price you would only get perhaps one floor of a landed house, which is likely to be old and lack modern infrastructure.
“Any developer looking at that model will get many local customers since condos have better services than older flats.”
Developer L Residency Cambodia, currently involved in five average-priced condominium projects with units priced from $29,000 to $50,000 per unit, said it had definitely seen growing interest from locals – even though it was mostly foreigners snapping up the relative bargains.
“Condo units prices from $900 to $1,200 per square metre are on the right course with the right target audience and I am not concerned about being able to sell them,” said official Tuy Bun.
“The reason we are building so many units like this is because there are more customers.”
Still, he said, investors from China remain a lucrative market. “They purchase 100 units or more at one time as a long term investment” he said.
