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

Tourism is the second largest pillar industry in Cambodia, accounting for close to 15% of Cambodia's GDP, providing more than one million jobs in Cambodia.

Tourism revenue is an important source of Cambodia's national economic income, and tourist attractions such as Angkor Wat in the country attract tourists from all over the world. Among international tourists, Chinese tourists, as the main source of tourists for Cambodia, play an important role in Cambodia's economic development.

According to the information released by the Angkor agency that manages Angkor's tourist attractions, from January 25 to 31, the number of foreign tourists visiting Angkor Wat was only 53,244, with an average of 7,606 daily. Compared with last year, foreign tourists visiting Angkor during the Spring Festival this year have dropped by 53%.

The sharp decrease in the number of tourists has severely affected Cambodian travel agencies, Chinese restaurants, and hotels, and even Chinese-speaking tour guides are facing unemployment. Recently, the Cambodian government began to worry about the outbreak of new coronavirus pneumonia affecting domestic economic growth. The Ministry of Finance and Economics of Cambodia stated that the outbreak of the coronavirus will slow down Cambodia's GDP growth rate. The actual growth rate is expected to be 6.1% this year, a change from the previously expected 6.5% .

The tourism industry was severely traumatized by the epidemic of the new crown pneumonia epidemic. The bleak picture of tourism-related catering and hotels is obvious, so how about real estate in Cambodia? The national economy will be affected or not?

First, Cambodia's real estate market is dominated by investment apartments, and Chinese investors are the main force. The Coronavirus directly caused Chinese tourists to stop or postpone outbound tourism and investment plans, which fundamentally reduced potential buyers. That is direct influence on property market.

Secondly, the panic caused by the Coronavirus affects investment in property. No matter domestic or abroad, people always put life and health first. Before the Coronavirus become completely controlled, the panic will greatly affect the buyers' psychology and desire for real estate consumption. In a short period of time, buyers will suspend overseas asset allocation plans.

Last, the Cornavirus has brought a huge impact on tourism real estate. As we all know, Cambodia is rich in tourism resources. Many provinces have beaches, seashores, islands and other seascape resources, which are suitable for tourism and vacation. At present, Cambodia's tourism real estate projects are numerous, with top tier seaview apartments, fine decoration, and freehold property that are favored by international investors. However, due to the impact of the Coronavirus, Cambodia ’s tourism industry has been hit hard, tourists from major attractions have decreased sharply, and short-term sales of tourism real estate have been incapable of selling projects.

The Coronavirus has caused a short-term impact on the global tourism industry. Not only Cambodia, but also other European countries have suffered different losses, but we believe that is controllable and will not have a long-term impact on the tourism industry. At this time After the epidemic, Chinese tourists' outbound tourism will definitely show a significant increase. By then, Cambodia's tourism industry will pick up and the real estate industry will see an investment boom.