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Cambodia: Real estate sector turning away from foreign buyers, survey finds
Cambodia’s real estate market is suffering from the effects of the Coronavirus pandemic as pre-Covid marketing was heavily geared towards foreign investors, a new survey has found.
Realestate.com.kh says the market has shifted away from overseas buyers and upper-middle class Cambodians towards a broader market with a different set of priorities and lower budgets.
Realestate.com.kh is Cambodia’s most-visited property website. This is the third year the portal has published its Real Estate Survey, receiving 2,000 responses. 60 percent of those taking part were Cambodian nationals, the remainder foreigners, 23 percent of whom live outside the Kingdom. Chinese nationals made up almost one-fifth of overall investors taking part in the survey, far outstripping other overseas buyers.
Despite the Coronavirus outbreak, which started to affect Cambodia in earnest in February this year, the survey found that some parts of the market are weathering the storm. While 20 percent of respondents to the Real Estate Survey 2021 say they stopped looking during the pandemic, 35 percent say nothing has changed in their property search.
Almost half those taking in part in the survey (47 percent) say they believe prices have fallen during the covid crisis. Nearly 60 percent say prices are now afford- able, moderately affordable, or very affordable. While top end homes still dominate, with almost half buyers prepared to pay more than $75,000, more than one quarter of potential buyers now have a budget of between $50,001 and $75,000.
In terms of buying trends, land is most popular overall, followed by shop-houses, villas, and apartments. Among foreign buyers, though, almost 50 percent choose condos because Cambodian law allows them to own non-landed property in their name.
In the rental market the impact of covid has led to some bargains. Nearly two thirds of respondents say they believe prices have come down. Still, only 6.7 percent of tenants say they received a discount, while just 5.2 percent of landlords say they offered one.
Phnom Penh remains the city of choice for both buyers and renters, with Sen Sok, Chroy Changvar, Chamkarmon, Toul Kork and Daun Penh the most popular areas to live.
As for commercial property, retail outlets, espe- cially in malls, are most sought-after at 42.1 percent, with office space at 19.1 percent edging out agricultural, warehouse and industrial space.
But some market-watchers say growing confidence in the first three months of the year has been erased, as Cambodian Covid cases pass 39,000.
“Most of the impact is going to be felt in quarter two,” says James Hodge, director of international real estate services firm CBRE Cambodia. “While the February 20th event had happened in Q1, the impact hadn’t been felt and it was looking fairly positive. We were seeing interest picking up in the office market and even residential. What we have witnessed in the second quarter with the lockdown and restrictions is a more fragile market. Buyers and tenants are in a stronger position, it’s more apparent they have more bargaining power, so we’ve seen a swing to them”.
Mr. Hodge says he expects the property market to recover towards the end of the year, particularly in the capital.
“The vaccination program is going pretty well, which gives hope that the Phnom Penh market will be more stable by late Q3 and into Q4. We expect the residential market to start to come back in Q3. It started to get going at the end of May for condos and land. We expect to see a steady recovery in the residential sector. For the commercial market deals will still be done. The office market is looking more competitive with more challenges for retail due to the situation out there. Retailers were active early in the year, but lockdown has knocked confidence”.
CBRE Cambodia says factories, warehouses and agricultural property have not really been affected by the COVID outbreak, with rents and prices relatively stable.
Source: https://www.khmertimeskh.com/50875164/real-estate-sector-turning-away-from-foreign-buyers-survey-finds/