PM Hun Sen: real estate market continues stay stable

Although the Covid-19 crisis has an effect on Cambodian economy, the real estate businesses continue as usual and the shophouse business has become more popular recently, according to Prime Minister Hun Sen’s official Facebook page on 30 June 2020.

He also mentioned this during a visit to the construction of the new Phnom Penh Airport that despite the fact that the Cambodian economy is predicted to grow at the negative rate in 2020, some of the company’s project continued their construction as usual.

“Although the Covid-19 crisis has an effect on Cambodian economy, the real estate businesses continue as usual and the shophouse business has become more popular recently, according to Prime Minister Hun Sen’s official Facebook page on 30 June 2020.”

The COVID-19 has led to a global economic downturn, which is self-evident for the huge impact on the Cambodian economy, which is highly dependent on foreign investment. The Royal Government of Cambodia has made an economic forecast report for the first time, predicting that Cambodia’s economic growth rate in 2020 will be -1.9%, unprecedented low in history. It is predicted that the economic growth rate will steadily rise to 3.5% in 2021.

As one of the key pillar industries in Cambodia, the real estate industry has experienced a decline in the real estate market since the outbreak, and the construction sector has been affected. According to the latest report from the Ministry of Finance and Economics, affected by COVID-19, the real estate industry is expected to experience a negative growth of 5.3% in 2020, and next year it may reach a growth rate of 3.3%.

It is worth noting that, compared with the real estate trading market, the investment in construction projects has not yet shown a significant downward trend. director of the municipal land management, urban planning and construction department, Sarin Vanna revealed in June that the market's investment popularity and project approval rate continued to rise in the first quarter of this year, and the amount of investment increased by 43% over the same period last year. From January to May this year, Phnom Penh attracted a total of 583 construction investment projects, involving a construction area of 281,317 square meters, with a total investment of approximately 1.375 billion US dollars.

At present, investment in the first quarter of this year will not be affected, but the epidemic continues until now, the foreign investment environment is reduced greatly, foreign investment will be reduced, and the impact on the Cambodian real estate investment market will be more obvious in the second half of the year. The Ministry of Finance report pointed out that the reduction of investors will rebound next year and recover gradually.

In terms of market transactions, real estate sales keeps quiet for a short time, but in the long run, Cambodia’s rigid demand market is still promising. With the increasing demand for local housing, coupled with the diversification of products, products such as economic apartments and townhouses provided more choices for customer. It will support the steady development of the Cambodian real estate market.

Compared with tourism, manufacturing, and service industries, the real estate sector is more stable and controllable. The recovery of the global economy and the Cambodian economy and the control of the epidemic will determine the speed of development of the real estate market.