Affected by COVID-19, 80% agency company still shutdown

The impact of the COVID-19 on the global economy is self-evident. China's sales office has been closed, and the housing companies has been forced to suspend. The subsequent self-rescue of real estate company and the opening of online sell model have followed. With the gradual stabilization of the China epidemic, the domestic sales office has gradually resumed work, but the global epidemic has intensified and the impact on other countries has just begun.

In spite of government emphasis that construction sector stay stable, but the property market is affected.

Compass date center found that among 30+ new projects, most of them are work as usual, but date between Phnom Penh and Sihanoukvile shows great difference.

Among the 20 projects in Phnom Penh, only two projects are suspended and one project workers are working from home. Other projects are open normally. The more popular Urban Village Phnom Penh, R & F City, and Agile Sky Residence still work normally. With the development of the epidemic situation, some projects may adjust their work situation later.

Among the 13 real estate projects in Sihanoukvile, only two of them are working normally, and the rest are working from home or suspended. The surge in confirmed cases in Sihanoukvile may bring further pressure on new projects.

In addition to the new project affected by the epidemic, the impact on the agency market may be even greater.

The Compass data center surveyed nearly 300 intermediary companies and institutions. Not more than half of the agency companies that were operating normally and working from home. As many as 98 agency company were suspended. Nearly 60 intermediaries could not be contacted. They were basically closed. Another 8 % Of agency companies have closed.

From the prospective of the three cities with more agency companies, Phnom Penh has the most agency companies, and only 40% of the companies are still working as usual.

Mr Quincy, the principal of iNEST agency company in Phnom Penh, said:

"The COVID has a great impact on the rental business. There are basically no new customer to rent housing. A small number of customers are mainly changing housing. They want to change one bigger housing for the same price even cheap. "

The specific impact is reflected in following aspects: "First, many landlords have started to suspend rent business; second, landlord did not expect that prices are dropped so quickly, thus rental are set as before, they change it slowly, and they have not kept pace with market supply and demand; the third aspect is a large number of Chinese restaurants are closed, customer demand is reduced, and there are very few customers from Europe, America and other countries. "

Except for Phnom Penh, the business situation of Sihanoukvile is not very optimistic.

At present, only a quarter of agency companies in Sihanoukvile are still working as usual, and 60% of the agency company have closed down. There are not many agency companies left. The shutdown of Sihanouvkile's agency company has to be traced back to the ban on gambling last August.

Cambodia's real estate market is in the early stages of development, but overseas investment is popular which attracting a large number of real estate intervention, especially in Sihanoukvile.

The Cambodian property market lacks unified supervision and industry regulations. The requirement to entry are loose. Agency companies of all scales have sprung up and the quality is uneven. However, Cambodia's real estate is highly dependent on foreign investment, and the demand market has not yet formed on a large scale, and the survival of intermediaries faces too much uncertainty.

In August 2019, Cambodia issued a ban on gambling. The withdrawal of a large number of gambling workers from Sihanoukvile directly affected the new projects and rent housing market, and a large number of agency companies were in danger. The economic bubble in Sihanoukvile is the largest and the impact is the greatest. The real estate market is bound to experience painful period. The disappearance of a large number of agency companies is inevitable. This epidemic is only the final straw, and the impact of gaming ban is even greater.

Cambodia's industrial foundation is weak, pillar industries are highly dependent on foreign investment, and its economic form is single. After the rectification of gaming and theCOVID-19 epidemic,Could the real estate market return to its former glory?

Mr. Quincy from iNEST said that the real estate outlook is not clear. "First of all, the advantages of Cambodia's freehold property rights + US dollar assets + no foreign exchange control, and coupled with the potential rigid demand, the real estate market still has a certain prospect.

But the disadvantages are also obvious. "Although Cambodia wants to use real estate to stimulate the development of various industries, its resource is obviously not enough. Housing prices are growing too fast. It has gone through more than 10 years of growth in China in a short period of time. The main customer usually are foreigners, the rigid demand market is not fully formed. Cambodia ’s entity economy and supporting facilities have not kept pace with the development of real estate. It is not easy to overcome this difficult. Factors will affect the development prospects of the real estate industry. "

It is true that the economic shock is a challenge, and the COVID-19 will also survive the fittest. If it is able to withstand the risk of this virus, the remain company may usher in the spring of the Cambodian property market!