Logo of Phnom Penh Post newspaper Phnom Penh Post - Capital’s condo rates dip slightly in Q3, with no new projects

Capital’s condo rates dip slightly in Q3, with no new projects

Content image - Phnom Penh Post
An aerial view of condominiums and high-rises in the capital's Chroy Changvar district in September. Hong Menea

Capital’s condo rates dip slightly in Q3, with no new projects

Global economic growth uncertainty has sapped considerable momentum from the Phnom Penh condominium market, which is well-known for its heavy dependency on foreign customers, with no developments in the capital completed or ready for move-ins in the third quarter (Q3) ended September 30.

In its “Phnom Penh Market Insights Q3” research report released last week, real estate firm CBRE Cambodia underlined that global headwinds continue to hamper the capital’s condo market, in terms of construction processes, transactions and rentals, leaving the condo supply at 36,000 units as of September 30, unchanged from three months earlier.

The company, the local affiliate of US commercial real estate services and investment firm CBRE Group Inc, categorises condo projects as “high-range”, “mid-range” and “affordable”.

CBRE Cambodia noted that the average per-sqm prices of condo units in July-September were $2,639 for “high-end”, $2,078 for “mid-range” and $1,408 for “affordable”, edging down by 1.2 per cent, 0.8 per cent and 0.2 per cent quarter-on-quarter, respectively.

On the third-quarter rental market, average monthly per-sqm rates were $11 for “high-end”, $9.50 for “mid-range” and $7.80 for “affordable”, dipping by 0.3 per cent, 0.9 per cent and 2.3 per cent quarter-on-quarter, respectively.

CBRE Cambodia associate director of research and consulting services Kim Kinkesa told The Post on October 12 that although Phnom Penh condo sales rates and rents in the third quarter reversed the slight recovery witnessed over the previous three-month period, the changes are small and do not substantially jeopardise the overall stabilisation in prices that has been seen since the beginning of 2022 and is expected to continue until the end of the year.

The anticipated return of foreigners to the Kingdom over the next year is also expected to trigger significant demand and occupancy growth.

To this end, Kinkesa commented: “In 2023, [we] expect transactions and rentals to improve against 2022, with just a few new projects set to be put on the market, while prices remain stable.”

CBRE Cambodia last month predicted that, given significant improvements in the economic and political environments in the Kingdom and abroad, the capital’s condo supply could top 45,000 units by end-2022 and 65,000 units by end-2023.

Global Real Estate Association president Sam Soknoeun remarked that the condo market continues to struggle with low demand and persistent price drops, albeit slight, even nearly a year on since the Kingdom moved to allow the full-scale resumption of socio-economic activity.

On the flip side, the discounted prices offer interested Cambodians the opportunity to invest in and potentially live in condos, he said. “Since the advent of Covid-19, which led to a drop in the number of foreigners in Cambodia, I’ve noticed that some condo developments have lowered their prices and opted to market to local customers.”

Soknoeun cautioned that the condo market could continue to face pressure in the period from October-March next year.

The Ministry of Land Management, Urban Planning and Construction reported that it approved 2,811 construction projects in January-August 2022 with total registered investment of $1.662 billion – down by 90 developments and 56.7 per cent in terms of value over the same time last year.

Of these, 2,521 or 89.7 per cent were residential projects, down from 2,530 in the same time last year.

MOST VIEWED

  • Cambodia maintains 'Kun Khmer' stance despite Thailand’s boycott threat

    Cambodia has taken the position that it will use the term "Kun Khmer" to refer to the sport of kickboxing at the upcoming Southeast Asian (SEA) Games, and has removed the term Muay from all references to the sport. Despite strong reactions from the Thai

  • Chinese group tours return to Cambodia starting Feb 6

    Cambodia is among 20 countries selected by Beijing for a pilot programme allowing travel agencies to provide international group tours as well as flight and hotel packages to Chinese citizens, following a three-year ban. As the days tick down until the programme kicks off on February 6,

  • Capital-Poipet express rail project making headway

    The preliminary results of a feasibility study to upgrade the Phnom Penh-Poipet railway into Cambodia’s first express railway indicate that the project would cost more than $4 billion and would take around four years to complete. The study was carried out by China Road and

  • Thai boxers to join SEA Games’ Kun Khmer event

    The Cambodian SEA Games Organising Committee (CAMSOC) – together with the Kun Khmer International Federation (KKIF) and Khmer Boxing Federation – have achieved a “great success” by including Kun Khmer in the upcoming biennial multi-sports event on its home soil for the first time, said a senior

  • Bullets to bracelets: Siem Reap man makes waste from war wearable

    Jewellery is often made from valuable gemstones like emeralds or diamonds and precious metals like gold or silver, or valueless things like animal horns. But a man in Siem Reap has approached the manufacture of delicate pieces from a different angle. His unique form of

  • 61% of 2022 imports came from just 3 markets

    The three largest exporters to Cambodia – mainland China, Vietnam and Thailand – accounted for 60.94 per cent of the Kingdom’s total merchandise imports last year, at $18.245 billion, which was up 11.99 per cent over 2021, according to the General Department of Customs and Excise. Cambodia’s total imports