With the continuous lockdowns, the future of the condominium industry is unclear

Cambodia Compass report, 13th May - With the implementation of tougher lockdown measures last Khmer New Year, the Cambodian property sector is facing a new set of challenges. Phnom Penh, on the other hand, is at the core of the new quarantine steps, forcing many companies, especially real estate agencies and developers, to adapt once more.

Before the Khmer New Year, CBRE Cambodia, a leading real estate consulting company, released its Q1 2021 Market Study. According to their new assessment, the condominium sales industry saw a respite from the previous few years, with the high-end market increasing by 4.8 percent, the affordable market increasing by 3.5 percent, and the mid-range market decreasing by 0.4 percent.

The increase in average selling prices in Q1 2021, particularly in the high-end, is an intriguing trend because it contrasts with how the property market responded to the less serious November 28 incident. Though it's worth noting that Cambodia entered 2021 with high expectations, as evidenced by the National Bank of Cambodia's (NBC) optimistic economic forecast from January 2021.

Just 12 of the 19 planned condominium completions were delivered from the 2020 pipeline, according to the CBRE survey. Supply chain disruptions around the world are primarily to blame for the building delays.

The first quarter of 2021 saw a positive trend in rental rates, according to CBRE's report. The high-end saw a 1.3 percent rise, while the mid-range saw a 1.7 percent increase. The affordable business, on the other hand, grew by 3.5 percent quarter over quarter, owing to the market's move towards the sector.

Although these are encouraging indicators, according to CBRE, there is still a long way to go to make up for the declines in both selling and rental prices expected in 2020. In contrast, the high-end rental rate at the end of the reasonably strong first quarter of 2021 is already 9.4% lower than it was in the first quarter of 2020.

The ability of buyers to go out and spend is directly related to the recovery of the property market. Although it's too early to say how the lockdown will affect condo sales and rental patterns beyond 2021, we can expect the market to slow due to intercity travel restrictions and the additional red tape needed to travel between areas.

Source: Cambodia Compass comprehensive arrangement

Editor: Malinda         Chief Editor: Sunnie         General in Chief/Executive Producer: Nicole

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