Condominium supply in Phnom Penh will increase by almost 120 per cent this year, leading to a slight decline in rental prices, according to a forecast report by property firm CBRE Cambodia released on Wednesday.
The report obtained by The Post says the number of condos in the capital will rise by 119.5 per cent by the end of this year, from 14,173 units at the end of last year to 31,112 units.
The number of “affordable” condos will grow approximately 100 per cent. Mid-range condos will increase 78 per cent, while the high-end segment will grow 243 per cent, according to the report.
The report continued that the affordable segment will make up 23 per cent of market share, with mid-range constituting 43 per cent, and high-end condos increasing to 34 per cent of the market.
CBRE Cambodia director Ann Sothida said at the Fearless Forecast 2019 event in Phnom Penh on Wednesday that about 2000 condo units will be added to the market this year, causing rental rates to fall around five per cent.
Sales may exceed expectations
At present, the average cost to rent a condominium is between $10 and $15 per sqm per month. Sothida said that by the end of this year, prices will fall about five per cent due to the high supply.
Sothida said, however, that sales could still increase more than forecast since, of the projects to be completed this year, more than 50 per cent have already been sold.
The CBRE report predicts that this year, the cost of purchasing condominiums will average $1,600 to $3,100 per sqm.
Sothida added that not many new construction projects had been announced this year.
Ngeth Chou, a senior adviser at Emerging Markets Consulting (EMC), said the sharp increase in the number of condos could in the past have caused problems for the market – and it is still not popular with many local people.
“Local people are more interested in flats and villas. Cambodia has a special policy allowing foreigners to buy condominiums, so success depends on how they [project owners], make a connection with foreign customers,” he said.