Take a Glance at the Condo Market in 2017

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High-rise buildings in Phnom Penh are growing every day – most are condominium buildings that have gathered investments from national and international investors.

Market experts acknowledge that sales growth have slowed down over the previous years. Some people are still optimistic about the future market, as well as socio-economic conditions and demographic factors. The CBRE Cambodia releases report in Q3, show condo market increase 1 percent compare to last year in same period.

Sorn Seap, founder of Key Real Estate, said recently that condominiums are dominant within the real estate sector and there is a concern that the market may get stuck or have problems in the future: “However, if we see the number of supply and demand of condominiums currently it is not excessive for the market. But for the future, the condo supply is certainly large compared to the demand. But we don’t know what will happen to the market for the next two or three years. What will change over time?”

“The progress of ASEAN integration, economic growth, and the number of urban residents has increased. This causes heavy traffic and makes it difficult to travel. Combine this with the rise in land prices – I think people will live in condominiums in the future,” Seap said.

Experts in this sector raised similar experiences with neighboring counties that are similar to Cambodia such as Thailand, Malaysia, etc. These countries spent between 10 to 20 years to change the mindset of citizens to live in condominiums, and the cause of the change is due to traffic congestion and intensified land and housing prices. This has made people decide to live in condos because condos are more civilized forms of residences and are located near their workplaces.

Michael S. Nhim, member of Investors of SIDO Group, said he thinks the real estate market of luxury buildings — including condominiums – will be in a state of stagnation in 2017 due to a number of issues. First will be the slowdown of the economy in China. There’s also the growth of supply, and the concern from investors regarding the elections in the future.

He added, “I think the luxury property market is in a stupor, the same as 2016, but I think that real demand from the middle-income citizens will increase because Cambodia has a young population and they’ll need to prepare for their future family’s housing.”

Because the market is experiencing a slowdown, Nhim said that there will be some projects that might be completed later than the proposed time limit, and the construction and completion of some projects may be delayed.

Associate director of CBRE Cambodia, Ann Sothida, also said recently that the real estate market in the ASEAN region, not only in Cambodia, has slowed. And some markets in the region have been slowing down as well, with only Vietnam seeing increases in sales.

She continued, “This is the normal cycle of the industry. It’s not alarming because real estate is always decreasing and increasing between markets across countries.”

President of the Cambodia Valuers and Estate Agents Association, Kim Heang, said he thinks

That the condo market will be calm in 2017 and a few projects will be completed. He said that some construction projects may be delayed or cease construction if developers wait for customers’ investment capital to build. But developers with their own budget to build shouldn’t be concerned.

He continued, “The developers with their own capital to build have no fear of succeeding in its plans because the situation is not so serious or there is nothing alarming”.

However, Sear Rithy, CEO of World Bridge Land, which has built The Bridge project and The Peak with nearly $1 billion of investment capital, has been downplaying the issue, saying that the decrease in condominium sales came as a surprise. But, in fact, there are some companies whose sales have increased. But if combined, the figures show that the condo market did not diminish in terms of the speed of sale.

He added, “I think that in 2017 the market will be better because the country’s economy is still seeing strong growth and political stability.

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