Apartment market and demand may recover in the second half of 2021

Cambodian real estate experts predict that the apartment rental market will return to normal in the second half of 2021. After the global disease crisis was successfully prevented, the market is now in a slump.

Sothida Ann, CBRE Cambodia International Country Director, said this morning, December 30, 2020, for the current real estate market, both mid-range residential and mid-range condominiums are still going strong. Normal activity does not seem to be a serious problem, but the market that is facing the biggest problem is apartment rents will fall sharply by the end of 2020.

"For other markets, there are some side effects, but not as serious as the apartment market, especially in the fourth quarter of late 2020," said Sothida.

"By the end of 2020, compared to the end of 2019, the apartment rental market has declined by about 80 percent, for example, at the end of 2019, there were 100 tenants, now there are only about 20.  The reason for the drop in demand is due to the ongoing crisis," she continued.

"A large part of the market is foreigners and now they can’t leave their country, which is one of the reasons for the reduction in rental demand. On the other hand, even existing customers in some districts, even if the lease contract is not finalized, some tenants have spend extra money renting suburban accommodation to reduce risks such as accommodation in shared buildings, Shared elevator use and so on," she added.

With the above implications in mind, Ms. Ann Sothida also predicted that the apartment rental market will return to normal by the second half of 2021 after the world has enough capacity to prevent the spread of disease that is happening now.

Chrek Soknim, president of Cambodian Valuers and Estate Agents Association, said that in the current context of community outbreaks, activity in the overall real estate market has been relatively quiet. But the method of boosting the local sales market is still ongoing through technology.

However, Soknim stressed that what needs to be addressed and done now is to work with the Royal Government of Cambodia to prevent the spread of the disease in the community. Once this challenge is effectively curbed, it will boost the local real estate market.