A ban on online gaming towards the end of last year followed by the emergence of Covid-19 as a pandemic has not boded well for the real estate market in Sihanoukville, which has gone from boom to bust.
The market is way down from where it was just a year ago when the once famed coastal city was the go-to investment destination for Chinese real estate investors.
But since the beginning of this year, there have been few positive signs, say real estate experts in the Kingdom. Industry insiders are holding out hope, however, that money will return once Covid-19 is contained.
The large numbers of Chinese tourists and investors that flocked to Preah Sihanouk province in recent years drove up real estate prices and leasing activity in the region dramatically during the 2018-2019 period.
The government’s ban on online gambling that took effect on December 31, last year, however, resulted in a mass exodus of Chinese nationals.
Cambodian Valuers and Estate Agents Association president Chrek Soknim told The Post on Wednesday that the decline of Chinese investor activity, coupled with the global outbreak of Covid-19 has made the province’s real estate market less vibrant than before, with prices plummeting sharply from the same period last year.
Overall, the property market in the province has declined since the online gambling ban, he said.
“It could be said that the huge drop in property prices is almost in sync with the overall decline in the economy. It is not the bubble the buyers and sellers want, like before,” Soknim said.
During the peak of the previous business cycle, he said, real estate in some areas surpassed the actual market price by 150 per cent.
He said with the improvement in infrastructure in the province, he expects property prices in Preah Sihanouk province to rise again once Covid-19 has ended.
Oem Senghou, a branch manager at Century 21 Zillion Holding, a sub-franchise of real estate agency Century 21 Cambodia, said land in the province’s prime locations is currently valued at just over $3,500 per sqm, a steep drop from its $5,000 value last year.
“After Covid-19 is over, I expect the real estate market situation to recover, but growth will be gradual and will not see sharp increases like before,” said Senghou.
He said property prices are now down 20-30 per cent from the same period last year, while rental prices have fallen more than 50 per cent.
Late in November, the government announced it would spend $294 million to build 34 new roads and other infrastructure in the province.
Preah Sihanouk Provincial Hall spokesman Kheang Phearum told The Post that the pandemic had reduced economic activity and hurt real estate markets everywhere in the world, not only in the province.
However, he expressed optimism that all of the province’s business sectors would make a quick rebound post-Covid-19. He said officials are actively striving to build and repair infrastructure there.
“There is a lot of construction at this time so this will boost growth in the province in the future. At that time, the real estate market will [rebound] accordingly,” Phearum said.
He said up to 70 per cent of the roads, water supply systems and sewage systems in the province have been completed or will be finished by the first quarter of next year.