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Capital’s condo supply tops 36K units as market pick-up forecast

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The condo market started to recover slightly in the second quarter. Heng Chivoan

Capital’s condo supply tops 36K units as market pick-up forecast

Four condominium projects – categorised as either “mid-range” or “affordable” – were completed and ready for move-ins in the second quarter of this year, adding 3,204 units to Phnom Penh’s supply, 9.5 per cent more than in the previous quarter, raising the total to more than 36,000 units as of June 30, according to a new report by real estate firm CBRE Cambodia released on September 2.

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

In its “Phnom Penh Market Insights Q2” research report, CBRE Cambodia noted that the average per-sqm prices of condominium units in April-June were $2,671 for “high-end”, $2,096 for “mid-range” and $1,412 for “affordable”, rising by 1.5 per cent, 2.7 per cent and 0.7 per cent quarter-on-quarter, respectively.

On the second-quarter rental market, average monthly per-sqm rates were $11 for “high-end”, $9.60 for “mid-range” and $7.90 for “affordable”, increasing by 2.3 per cent, 3.3 per cent and 1.2 per cent quarter-on-quarter, respectively.

The report said that the condo segment and overall real estate market are “showing positive signs”, owing to macroeconomic improvements underpinned by high Covid-19 vaccination rates, uptrends in goods exports, increasing international arrivals, and the construction of new infrastructure.

CBRE Cambodia associate director of research and consulting services Kim Kinkesa told The Post on September 5 that, on the whole, condo sales, rentals and prices picked up in the second quarter, in a recovery she predicts will extend until end-2022, albeit remaining below pre-Covid-19 levels.

“Currently, the market relies heavily on locals because the number of foreign arrivals is still low,” she said.

Global Real Estate Association president Sam Soknoeun explained that condo buyers are chiefly Cambodians and foreign residents. “Since the market mainly targets foreigners, it still needs more time to recover,” he said, commenting that the broader real estate market is slowly normalising.

On the other hand, interest among locals in condos has seen a moderate uptick, with some owners now even looking to cater to domestic customers rather than foreign ones, he claimed.

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

The Ministry of Land Management, Urban Planning and Construction says it approved a total of 2,000 construction projects in the first half of 2022, representing an area of 2.860 million sqm and capital investment of $1.206 billion.

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