Compass Real Estate > Cambodia Real Estate Information > Cambodian Estate News > How Is the Southeast Asia Real Estate Market Holding Up in The Midst of the Global Pandemic?

How Is the Southeast Asia Real Estate Market Holding Up in The Midst of the Global Pandemic?

Summary:​Overseas real estate has been one of the main ways to get into global asset allocation. At the same time, as the result of the activities of Southeast Asian countries' economic development policies, the demographic dividend, and the "Belt and Road Initiative," global capital is gradually being transferred from Europe and American countries to Southeast Asia.

Cambodia Compass report, Overseas real estate has been one of the main ways to get into global asset allocation. Besides, as the result of the activities of Southeast Asian countries' economic development policies, the bonus dividend of approximately 650 million people, and the promotion of China's "Belt and Road Initiative," global capital is gradually being transferred from Europe and American countries to Southeast Asia. In terms of changes, it has prompted many scholars from all over the world to refer to ASEAN as "the engine of the global economy in the next 20 years."


Even though ASEAN has the most positive development dividend, the main burgeoning economies are still the ones that are developing. That is also a question: will Southeast Asian countries be able to withstand the pressures of a global economic recession, which has been raging since early 2020? With its original boom in economic development, what is ASEAN going to face in this post-epidemic? Also, how strong will the impact be on the area's market that has just been turned back and has to face up again to the 2021 new wave of COVID-19 that has suddenly worsened?

The Compass Southeast Asia Real Estate Platform, which focuses on researching the region's economic development and property market to provide a reference for real estate investment, will this time go over the before and after epidemic of property development in Southeast Asia.

I. Southeast Asia's Economy Performed Better Prior to the Outbreak

Cambodia, Malaysia, Indonesia, Thailand, the Philippines, Singapore, Brunei, Vietnam, Laos, and Myanmar are members of the Association of Southeast Asian Nations or ASEAN.

Due to the majority of associate members’ countries are developing ones, resulting in a gap in economic strength; Singapore, however, is the only one that has developed in these areas. On the other hand, since the Asian financial crisis and the 2008 financial crisis, ASEAN has become the main force of world economic growth, especially four members of the association: Cambodia, the Philippines, Vietnam, and Thailand, show a strong sense of development momentum.

According to the "ASEAN ECONOMIC INTEGRATION BRIEF" report, which was released in June 2019, the overall growth of ASEAN's economy in 2018 remains at a high level of 5.1% [1]. Real GDP growth was shown at an average of 5.2%, with the result that Thailand was 4.1%, Cambodia was 7.5%, and Singapore was 3.1% [2]. For the field of trade, ASEAN's total trade in goods is about US 2.8 trillion dollars, with the total trade in services about the US 77,800 billion dollars [2].

There is nothing indifferent about the region's performance in 2019, as they continue to perform at a high level. Based on the data from "Economic Outlook for Southeast Asia, China and India 2019" [3], the economy of Southeast Asia at that time is expected to grow up to about 5.2% between 2019-2023, which is higher than the growth rate in 2012-2016. In particular, the average GDP of Southeast Asian countries in 2019 has already reached the expected value of 5.2%, of which Thailand is 4.1%, Cambodia is 6.9%, the Philippines is 6.5%, and Myanmar is 6.9%.

II. The Property Industry's Inexhaustible Vigor and Rapid Economic Development

According to data from the "Asia-Pacific 2018 WRAP UP" [4], most ASEAN countries' real estate markets are always vibrant, with investors active and stable. Furthermore, even though the office-type property is generally undervalued in the market, it is one of the most eye-catching assets here. The annual rent of High-End Office buildings in Singapore has changed significantly in this period, which is an increase of 21%. The main rent for office buildings in Bangkok, Thailand, showed an increase of 4.4%, up to 1045 THB per square meter per month. Residential prices are also rising at this time, with the market price of high-quality housing in Singapore rising by 9.1% to S $3480 per square foot in the first half of 2018, and in Manila, the Philippines rising by 11.1% to 290,000 Philippine pesos / m2.


Southeast Asia's real estate markets will once again re-explode in 2019. According to CBRE's "2020 Singapore Market Outlook"[5], since the last trough in the second quarter of 2017, Singapore's office space or office building, for Class A type (The Core CBD), rent increased by 29.1%, to $11.55/sq.ft/month. This is due to the reduction in the vacancy stock, with the vacancy rate reduced from 5.1% in 2018 to 3.9% in 2019. In addition, for Cambodia, based on the report data [6], the total number of stock apartments in the market has risen by about 120% in 2019, while the Service Apartment Unit has also maintained a healthy performance.

Between 2012 - 2019, according to "ASEAN INTEGRATION IN SERVICES"[7], the total amount of foreign direct investment in services in the ASEAN countries has reached US 92 billion dollars, with an average value of FDI of about 43%, containing the real estate industry that accounted for the highest proportion, reaching 23%.

III. The Development of Southeast Asia's Heavy Industries Was Hampered By The Epidemic

In early 2020, COVID-19 began to wreak havoc all over the world, and, even until this day, it continues to be the biggest obstacle to global economic development. Therefore, as one of the largest economies, Southeast Asia, is inevitable, even the pillar industry, tourism, will also suffer a heavy setback.

As is well known, tourism is a key industry in most Southeast Asian countries. Firstly, the consumption of domestic and foreign tourists can stimulate the domestic economy; Secondly, the more developed, the more tourism could provide more employment opportunities for the locals. Moreover, the development of tourism is conducive to the building of an international reputation as well, which leads to the need to seek more attention from investors all around the world. Indeed, the geography of Southeast Asia's member countries offers numerous tourism opportunities. However, the boom in the epidemic has made most parts of the world have to be locked in a blockade. Going abroad and traveling has become a powerless extravagance, which has caused the tourism industry in Southeast Asia to suffer from an unprecedented heavy blow.


In addition, this COVID-19 pandemic at the same time also affected many major domestic activities in countries. As for preventing, controlling, and fighting back against the situation, domestic activities in various countries have shown a significant decrease. Whether national traditional festivals, religious activities, parties, events celebrated, mostly banned.

IV. Countries Are Actively Fighting Back Against the Aggravation of the Epidemic Situation

At the beginning of the epidemic, right after each ASEAN member country confirmed its first case, each country immediately launched prevention and control strategies to control the breakout. On the other hand, ASEAN itself has rapidly launched its regional health mechanism, establishing stronger regional cooperation and coordination among the members, taking timely measures to bridge the gap and promote knowledge and information exchange [8].

Almost all Southeast Asian countries will be dealing with a new epidemic wave in 2021. So, in order to minimize the impact, the governments of all countries have actively introduced various epidemic prevention measures.


Cambodia's Ministry of Health continues to collaborate closely with the World Health Organization, while the government and partners also maintain close cooperation. The key prevention and control measure for Cambodia presently is to implement vaccinations. It is reported that the Cambodian government has promulgated the "2021 Coronavirus Vaccination Campaign Strategy", which plans to vaccinate 6.22 million adults in three stages by late this year. Moreover, it is noted that by the end of this June, more than 4.1 million people in Cambodia have received at least the first dose, and nearly 3 million people have been fully vaccinated (Source: Our World In Data).

In terms of promoting vaccinations, Thailand has also launched its universal vaccination of the COVID vaccine on June 7. Furthermore, by the end of the same month, more than 6.9 million people in the country had received at least one dose of the vaccine, and about 2.7 million people had been fully vaccinated (Source: Our World in Data). It is reported that Thailand is also vigorously promoting the recovery of the tourism industry. Phuket will be open in July for people with vaccination certificates to be exempt from quarantine.

By the end of June 2021, Singapore had about 3.2 million people who had successfully received the first dose of the vaccine and about 2 million people had been fully vaccinated (Source: Our World in Data).

As could be seen from the perspective of each national epidemic prevention measure, accelerating vaccination is the key to winning the war. With the establishment and improvement of the region's immune system, opening the border doors again, restoring tourism, and reviving the national economy are all expected to be realized.

V. The Slowing of the Real Estate Market Differs By Country

Although the epidemic has now become normalized, its impact has already altered all aspects of people's lifestyles. As one of the most important parts of the country recovers, real estate has entered a new era.

Under the terms of the global economic recession, based on the pressure of inflation, asset preservation, and other factors, residential prices of the world's major economies have started to rise unstably.

1. Thailand: Sluggish market, with both supply and demand declining

Thailand is not only one of the first members of ASEAN, but also one of the fastest-growing countries among all the members. However, what has changed since the outbreak?


According to a series of data released by The World Bank in June 2020, the outbreak has shaken Thailand's domestic economy. Especially in the second quarter of the year, the unemployment rate soared and has mainly affected middle-class households and poor people. In the field of trade, export volumes decreased greatly in the same year, which is the sharpest quarterly contraction in five years [9].

Similarly, Thailand's real estate market is also not optimistic:

The First Quarter of 2020 [10]: Because of the unprecedented impact of the epidemic, the Bangkok condominium market's initial weakness led to a slow sales rate. During this period, the number of new developments has decreased by 64% year on year, to 6245 units, which is the lowest supply number in the last decade. In the hotel field, the occupancy rate decreased by 29.0% year on year. For Office Type Property, supply areas increased by 1.6% year on year with four new projects getting completed at this time. However, due to a significant slowdown in demand for office property, the net occupied area has decreased by 47.2% year on year.

The Second Quarter of 2020 [11]: At the start of the quarter, the condominium market in Bangkok was even more adversely affected, with the number of newly launched apartment units down 74% year on year, to 3451 units. In the hotel field, as there are no international tourists in this quarter, the occupancy rate decreased by 59.9% Y-o-Y. Besides, at the same time, there are 7 grade B non-CBD buildings in the office session that have been completed, yet the occupied area dropped to just 16,805 square meters from the previous quarter, which has decreased by 23.4% Q-o-Q, and a 68% Y-o-Y decline.

The Third Quarter of 2020 [12]: Even having entered Q3, the condominium market in Thailand still continues to be seriously affected, with the number of newly launched apartments declining by 25.9% year on year. The overall vacancy rate of office space decreased from 91.6% in the previous quarter to 91.1% due to the growth of supply and the decline in the utilization rate.

The Fourth Quarter of 2020 [13]: The new wave of epidemics in December has reduced the confidence of Thai apartment investors and developers, which has made the market's decontamination rate lag behind. In this quarter, the hotel occupancy rate was 20.2%, down 58.3% Y-o-Y. As for the 2020 market status, the average occupancy rate is 24.0%, a decline of 54.0% year on year. At the end of the quarter in Bangkok, Thailand, the total supply of office buildings was 9.23 million square meters, an increase of 0.7% Q-o-Q, with the occupation having returned to an optimistic state, a 136% year on year increase.

The First Quarter of 2021 [14]: Due to the several waves of the epidemic, as well as the downturn of Thailand's economy, the condominium market in Bangkok still had to experience a more negative impact, with the marketization rate continuing to slow down, the fall in the unit supply, and a 22.0% year on year decline. Office space, the supply area of office buildings in the capital Bangkok is 9,256,188 square meters, a 0.3% increase by the end of the quarter. Meanwhile, the net occupancy rate fell to a negative level, down 465.3% quarter on quarter, and a 207.2% decrease year on year.

2. Cambodia: With the limitation of the impact, housing prices still maintain stability

Cambodia officially became a member of ASEAN in 1999. In the last recent years, the development in all aspects of the country has shown an obvious positive trend. However, in the post-epidemic, Cambodia's development has been limited a lot. The domestic economy, commerce, as well as many real estate projects have been suspended for the time being or even called off. In this context, the development of Cambodia's real estate industry has been affected to some extent in 2020, yet the overall growth still remains at a slow speed of increase.


The First Quarter of 2020 [15]: According to CBRE's data, in the first two months of the quarter, Cambodia had 728 public and private construction projects approved, with a total investment of nearly US $2 billion. However, in March, the country's real estate industry gradually entered a slow development trend because international investors were hindered by the epidemic.

The Second Quarter of 2020 [16]: The hotel and retail industries have suffered further negative effects, with demand decreasing significantly. Fortunately, driven by the demand in the local market, the land investment market and the real estate sector are still very active. Due to the ongoing attack, many new major projects' construction progress was hampered during this period, as well as no new completed projects entering the market, causing overall supply to remain the same as in the previous quarter.

The Third Quarter of 2020 [17]: Compared with the same period of 2019, the overall level is slightly depressed, yet when compared to the second quarter of 2020, the market rental and sales transactions are still increasing. Furthermore, there is a new supply breakthrough, with a 3.97% increase in the supply of apartment units in Phnom Penh. This quarter, 3 new projects have entered the development phase. This performance also reflects the fact that developers still remain optimistic about the real estate market.

The Fourth Quarter of 2020 [18]: Although Cambodia's retail industry has some pressure on the rents of retail platforms and community shopping centers, the rents of key shopping centers and commercial areas are not being affected.

However, after the slow growth and capacity savings in 2020, there is expected to be a new break in 2021. However, the "2.20 Incident" suddenly cast a shadow on the recovery of Cambodia's industry again.

The First Quarter of 2021[19]: the occupancy rate of retail centers decreased by 8.6%. In terms of apartments, the overall rent remains stable, while the rent for high-end apartments is still rising. For the new development market, project sales prices fell by an average of 15% during this period. Furthermore, the number of approved construction investments increased by 18% in the first two months, but the total investment has decreased by 38% year on year.

The Second Quarter of 2021: As the government's epidemic prevention measures strengthened, even Phnom Penh opened the closure mode, yet with the rapid resumption of work, the actual impact on the real estate industry was limited. According to the latest data from Compass Real Estate Platform, the average price of new developments in Cambodia was $1926 / m2 in May 2021, which has continued to decline slightly. While the average price in the core of Phnom Penh was $1980 / m2. In Sihanoukville, due to the continuous outbreak, the average price of the residential houses remains at $1945 / m2, while the overall stable, with no obvious decline in listed house prices.

 3. Singapore: A thriving real estate market, with both supply and demand increasing at the same time

Since joining ASEAN, Singapore has been regarded as a developed country with rapid development in the last ten years. The stable economy and business of the country are always the love of all investors in the world.


However, the 2020 outbreak also had a great impact on Singapore's real estate market:

The First Quarter of 2020 [20]: The Property Price Index (PPI) of non-landed private residential properties decreased by 1.0% to 148.1 Q-o-Q. Meanwhile, the three market segment prices (Total Non-Landed Units Sold in the Primary and Secondary Markets, and the URA Property Price Index for Non-Landed Properties) have also decreased.

The Second Quarter of 2020 [21]: compared with the 1.0% decline in the previous quarter, the price of private housing in Singapore increased by 0.3% in this period. Furthermore, the price of land properties remained unchanged, while non-landing goods in the Core Central Region increased by 2.7%. However, the private residential property rent index fell by 1.2%, and the land property rent index fell by 2.3%.

The Third Quarter of 2020 [22]: The developer launched 3,791 uncompleted private residential units (excluding ECS) in this quarter. At this time, private housing prices rose by 0.8%, prices of landed properties increased by 3.7%, and non-landed properties in the Core Central Region (CCR) fell by 3.8%. Meanwhile, private residential property rents also fell 0.5% in the third quarter, compared with a 1.2% decline in the previous quarter. Landed property rents fell by 0.1%, while non-landed property rents fell by 2.1% in the CCR.

The Fourth Quarter of 2020 [23]: In comparison to the 2.7% increase in 2019, the price of private housing has increased by 2.2% for the entire year of 2020. In this quarter, private housing prices rose by 2.1%, landed property prices fell by 1.6%, and non-landed property prices in the Core Central Region (CCR) rose by 3.2%. In terms of the rent index, private residential properties increased by 0.1%, while landed properties increased by 0.7%, while non-landed properties in the CCR decreased by 1.2%.

The First Quarter of 2021 [24]: Compared with the 2.1% increase in the previous quarter, private housing prices rose by 3.3% this quarter. Landed properties increased by 6.7%, while non-landed properties in the CCR increased by 0.5%. Besides, the rent of private residential property increased by 2.2%, while the rent of landed properties increased by 0.6%, and the rent of non-landed properties in CCR increased by 2.9%.

 4. Philippines: Oversupply, Little Recovery

When ASEAN was founded in 1967, the Philippines was one of the first members. Later, because of the rapid development of urbanization and the advantage of the young average age of the country [25], the Philippines became one of the most dynamic countries in Southeast Asia and the East Asia Pacific region. Yet, in the face of the epidemic, the Philippines is still deeply affected.


The First Quarter of 2020 [26]: Only about 1670 new houses were successfully delivered in this period, which is the lowest number of completed houses in the past six quarters. Moreover, during the same period, the office buildings supplied in Manila, the capital of the Philippines, increased by only about 93,500 m2, which is the lowest office completion rate since the third quarter of 2015. The transaction area of office buildings that cover pre-rental space decreased by 24% to 241,000 m2 year on year.

The Second Quarter of 2020 [27]: the demand for office space in the Philippines decreased by 46,200 m2, while the supply area increased by 57,500 m2. In the housing market, however, demand for residences in the Philippines fell by 665 units in this quarter, while supply remained stable and did not grow. For the rental ratio, it fell by 2.1%.

The Third Quarter of 2020 [28]: Since the demand for office space in the Philippines has been negative for two consecutive quarters, the market demand has continued to fall in this quarter. It had a 191,300 m2 decrease in the unit area, while the supply area had increased by 77700 m2. Housing demand fell by 952 units, while supply increased by 625 units, with the rental ratio falling by 3.4% in the third quarter.

The Fourth Quarter of 2020 [29]: The demand for office space in the Philippines decreased by 70,700 m2, while the market supply increased by 189,200 m2. At the same time, Philippine housing demand fell by 2612 units, while the housing market supply increased by 1080 units. The residential rental ratio fell by - 4.5% quarter on quarter.

The First Quarter of 2021 [30]: The market demand for office space decreased by 52,800 m2, while its supply increased by 199,900 m2. As of the first quarter, the rental ratio of office space was 3.7% lower than that of the previous quarter. However, in this period, although the virus continued to hinder the demand for pre-sale and secondary market housing, the demand for housing in the Philippines still rose by 2,518 units with a supply that rose by 4,145 units.

VI. The Economic Growth Target Was Lowered, Despite The Prospect of Still-Exciting Real Estate

Since the end of 2020, the economies of ASEAN countries have shown signs of recovery. However, due to the new wave of the epidemic, some Southeast Asian countries, such as Thailand and the Philippines, have lowered their economic growth targets. Overall, 2021 will be a year of slow growth and a return to normal economic levels.

The 2021-2022 economic growth in Southeast Asian Countries (according to The World Bank [31]):

Cambodia: It is predicted that the economy in 2021 will increase to 4.0%, while growth will be up to 5.2% in 2022;

Philippines: The growth rate is expected to reach 4.7% in 2021, and 5.9% in 2022;

Thailand: The economy is expected to grow by 2.2% in 2021 and will rise to 5.1% in 2022;

Laos: Economic growth is forecast to be 4.0% in 2021 and 4.6% in 2022;

Vietnam: The average growth rate in 2021 and 2022 is 6.55%, which is not far behind what was forecast before the epidemic;

Indonesia: It is estimated that the growth rate will be up to 4.4% in 2021 and 5% in 2022;

Malaysia: if the epidemic can be controlled, the country's economic growth forecast is 6% in 2021.

Meanwhile, according to a CBRE data survey [32], the real estate status will be maintained between 2021-2022, as construction costs will also be declining, as a result of the comprehensive price adjustment of projects by the industry's major developers that occurred in 2020. However, under the terms of the economic recovery in various countries, the development of the real estate market in Southeast Asia is still dominant.


Based on the "Global Investor Intentions Survey 2021" [33], with the gradual recovery of the international economy, the global real estate sector will be the industry that is valued by most buyers and investors. The weight of capital chasing a limited supply of available assets may help stabilize prices. According to the same forecast, the global investment will increase by 15% to 20% year on year in 2021, owing primarily to a strong rebound in the Americas. Moreover, approximately 70% of buyers intend to purchase an additional 20% of their properties this year. At the same time, investors who have been paying attention to Southeast Asian markets will notice that, as the epidemic situation normalizes, the impact on various countries' real estate markets is gradually becoming stable, as it will never cause the market to fall again. In Cambodia, even though the epidemic is still in its infancy, the largest comprehensive entertainment industry in the country (Naga 3) has broken the ground and continues its construction process, while the planning of diamond islands in emerging areas is also advancing in an orderly way. Furthermore, because the Southeast Asian real estate market always has a high rental return, as well as permanent property rights, lower down payments, lower total prices, and so on, the development prospects are still favorable.

In addition, according to JLL's investigation report on health care real estate [34], the acts on coronavirus assistance, relief, and economic security, as well as other factors related to the pandemic, will eventually lead to an increase in the number and in the demand for medical properties in various countries. Thus, medical and convalescent real estate projects may become one of the hot investment projects after the epidemic in the future.

VII. The Region's Market Is Becoming More Stable as Domestic Demand Gradually Recovers

Before the outbreak, suddenly rising out of no place was always one of the causes that made the Southeast Asian property market paired up with the word "Bubble". In fact, the fundamental reason is made up of how overseas investors pour large amounts of money into the market, causing the price of housing to rise. However, due to the local "In Need" buying habits, as well as the influencing factors of high housing prices, with the wait-and-see attitude of all types of home buying, ASEAN's property market share is not exactly as high as expected. The term for the main driving force of the region's market is always overseas investors. There are many hidden dangers within its sweet high return value.

Right after the outbreak of the epidemic, as the region's market was no longer rapidly developing and overseas investors began to take a break, the locals "in need" began to change their attitudes, and domestic demand was eventually just enough to get the market back on track, reducing the positive effect of "Bubble" prices. As a result, from this vantage point, the Southeast Asian property market in the post-epidemic era may experience healthy growth.

People in the post-epidemic have changed their mindsets in specific demand areas, paying more attention to the control of future resources as the way that they make high-quality residential projects is beginning to boom more than ever before. At the same time, developers from around the world are also actively adapting to the situation by gradually making changes, and trying to maintain a more harmonious relationship between supply and demand, in order to provide the driving force for good development in the market.

VIII. References

1. The Association of Southeast Asian Nations

2. The Organisation for Economic Co-operation and Development

3. Knight Frank


5. The World Bank 

6. The Urban Redevelopment Authority of Singapore

7. The Colliers

8. JLL: Commercial Real Estate

Source: Cambodia Compass original

Editor: Thangnyth, Liu Yuan        Chief Editor: Sunnie         General in Chief/Executive Producer: Nicole        Translator: Thangnyth

Compass global site: Cambodia | Singapore | UAE | Thailand | Philippines | Myanmar | Laos

  • ---------------------------------- The End ----------------------------------

Disclaimer: The re-forward articles on Compass website are for the purpose of conveying more information, and it does not mean that the Compass website agrees with its views or confirms the authenticity of its content. Article noted as "Source: Compass original", please note that the source from Compass. The content of the article is for reference only and should not consider as investment advice, and it does not mean that Compass agree with its views.


Latest comment
  • Rent
  • Buy
  • Land for rent
  • Land for sale
Compass customer
{{showTime.show_time}} active
Image is being sent:
Message loading
Message failed to load, click to try again
Send a business card to{{ taname }}
Start sending
No recent contacts
  • {{ind.unreadMessageCount}}
    {{ind.sentTime | time}}
  • Recent contacts are loading
  • {{item.nickname}}
  • {{follow.house_name}}
    {{follow.house_province}} {{follow.house_city}}