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Cambodia: Low prices in tough times lure buyers to Siem Reap
Siem Reap may not have the crowds that it used to but it still attracts visitors, albeit of a very different kind. Daka Kun Realty often sees them entering their office in Taphul village and announcing exactly what it is they are looking for: low-cost property.
The news of the temple town’s hard times have reached far and wide within the Kingdom, attracting keen investors looking for properties well under market value. Both Daka Kun Realty and IPS Cambodia have observed this trend grow more pronounced in recent months.
According to Daka Kun, buyers coming to Siem Reap often look for properties for as low as 40 percent below market price. She notes areas such as Svay Dangkum, a big commune in Siem Reap, and Sala Kamreuk, an area popular among expatriates, are locations often considered by property buyers if they are not looking for commercial properties in the city centre.
IPS Cambodia concurred, observing that while property sales prices in Siem Reap largely remain unchanged, they have cash buyers, both local and foreign and they are looking to buy in any part of Siem Reap where they can find distressed sellers,” said the company.
In terms of property, villas, shophouses and flathouses are the most common residential properties being considered. IBS noted the market for well-priced, Western-style homes and villas remains strong because of strong demand for home purchases and a low supply of these properties on the market.
While Siem Reap’s property sales market has managed to maintain interest, the same cannot be said for rental properties. “It’s been tough,” said one agent. “I’ve tried a lot of things from cutting overheads, offering package deals, to outright reducing prices. I consider it a win if I break even for that month”.
Siem Reap has a population of over more than a million residents according to the latest edition of the General Population Census 2019. This number swells by as much as another 2 million from the tourists arriving and departing the city annually. But as Covid-19 persists, tourist figures have dropped by as much as 77 percent so far in mid-2021, only being kept afloat by visiting locals.
The drop in tourism forced many rentals to either slash prices or suspend operations altogether. “Rental prices dropped to 30 percent with some to almost 50 percent below what they were before Covid”, said IBS. The company attributes the sharp decrease in rental demand to international borders being closed, adding that many tenants are moving out of their rentals to find lower-cost accommodation.
“Hotels, guesthouses, and serviced rental apartments have been hit the hardest,” Daka Kun observed. She added a considerable number of businesses operating in Siem Reap are foreign-owned and the continuing slump in foot traffic has forced many expatriate owners in the city to look for more affordable places to live.
David Granger of IBS was optimistic about the ongoing 38-road project. “Whilst the project does include the construction and upgrades of 38 roads, it is providing more benefits than that alone.”
The project includes improving and rehabilitating the drainage and sewage systems, electrical infrastructure and construction of pedestrian walkways and bicycle paths across Siem Reap. As of June 2021, progress on the 38-road project was at 63 percent and is expected to finish on schedule by the end of the year.
Granger is confident that the project will improve the quality of life in the city. “Residential and commercial areas within a two-kilometre (km) radius of the city are going to see vast improvements in infrastructure. Those within a five km radius of the city are going to see improved access and spurred development of new residential areas. And property owners up to 10 km out from the city are going to enjoy better connectivity to the city centre and other parts of Siem Reap,” he said.
“The 38-road project is one of the factors driving interest in the city,” said Daka Kun. “People know it will be a good thing for Siem Reap in the long-term, so they are looking to buy property near these roads today”.
Daka Kun notes that outer parts of Siem Reap may see a considerable jump in prices, especially if the property is by the roadside. “There are land properties in the city outskirts worth $20 to $30 per square metre that will see significant jumps in two to three years following the road project’s completion”, she said, adding city centre properties may also see a boost of around 20 percent in value, a more modest increase considering downtown properties are already pricey, to begin with.
The new Siem Reap International Airport is another project set to boost the city’s capacity to handle tourists. The new airport is located 51 km southeast of Siem Reap and began its construction in March 2020. It occupies 700 hectares and includes the construction of new 4E runways, taxiways, airside stations, terminal buildings, operational support projects, and external facilities including highways – all to accommodate a projected 7 million tourist arrivals every year. The project was at 42 percent completion in May, 2021 and is set to be done by sometime in 2023.
Source: https://www.khmertimeskh.com/50902205/low-prices-in-tough-times-lure-buyers-to-siem-reap/