Coronavirus may hit real estate but effect won’t last long, says expert

Staff at Phnom Penh’s Hotel Blue Lime in Street 19z take steps to protect themselves, guests and visitors from the deadly Novel Coronavirus. KT/Rachel Roberts

Although the Kingdom’s real estate has been enjoying strong growth, an industry insider said the new Coronavirus from Wuhan in China is likely to affect it.

The infection rate of the outbreak has not seen any sign of slowing down. The number killed has climbed to 170 and more than 7,900 worldwide are infected. More than 15 countries have been struck, including one case of a Chinese national in Sihanoukville last weekend.

Chrek Soknim, president of the Cambodian Valuers and Estate Agent Association, said that it would possibly affect the real estate market, but noted that the effect will not last long.

“The outbreak is an external factor and I believe that the situation will soon recove. During this time, it, of course, will have little impact on the rental segment of the real estate market,” he said.

“There should not be too much worry about it. It is just a short-term effect, I think,” he pointed out.

While Chrek acknowledged the impact on the industry, the Kingdom’s foreign direct investment is largely dominated by Chinese investors, especially in the construction and real estate sectors.

According to the country’s central bank, Cambodia attracted nearly $3.6 billion from foreign direct investment in 2019, of which 43 percent came from China. Chinese holidaymakers have also stood at the top of arrivals to the country, which last year received 2.5 Chinese visitors, a 25 percent hike on the previous year.

Last week, the Chinese government prohibited tourist departures, while many airline companies around the world that link their flights to and from China announced their suspension because of the virus fears. A vaccine against it hasn’t yet been found.

If the outbreak persist longer than expected, it is forecast that the global economy will slow down with all sectors suffering.

The SARS virus also emerged in China, in late 2002, and cost the lives of nearly 800 people. The Asian Development Bank estimated that the health epidemic caused billions of dollars in losses globally, pushing down the economic growth rate in East and Southeast Asia by 0.6 of a percentage point.(This news came from Khmertimes.com)