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Cambodia: Rental sector businesses share positive outlook for market in 2021
Despite the mass exodus of expats and foreigners causing a blip in Cambodia’s otherwise strong rental sector, realty businesses are forecasting a positive bounce back in 2021.
Sales manager at Asian Condo Brokers, Leigh Ratcliffe, says Cambodia as a whole is still a popular place for foreign investment despite the pandemic. “Phnom Penh especially appeals to a diverse range of people who travel to Cambodia to work in a range of sectors. This creates a diverse range of property needs and that spurs rental market demand,” he said.
“Our target demographic is made up of about 80 percent expats, who are relocating. During the initial COVID-19 outbreak period we noticed about a 20 percent drop in rental prices and leased properties fell in numbers by around 40 percent. By the end of 2020, the market had already started to recover,” he added.
Ratcliffe said the biggest challenge has been border closures and visa restrictions, which stemmed the flow of new arrivals. “The number of foreigners leaving and not being replaced led to apartment owners dropping their rental prices to match the shift in market value. In light of this, we changed our sales strategy to meet the climate created by the pandemic. We looked towards finding new rental property for people trying to save money and cut costs. However, now I believe we will see a positive increase in demand and competitive prices in 2021. With the vaccine rollout going successfully and a hoped for re-opening of borders taken into consideration, we expect to see the market back to normalcy over the year.
Paul Ellender, co-founder and manager of Abode Real Estate agreed on COVID-19 affecting the market in a number of ways and the need for businesses to pivot their strategy in the “new normal”.
“First, there was a mass exodus when warnings and restrictions around the world ramped up and many of our clients felt they needed to leave Cambodia. This started slowly, then sped up as options for leaving started to diminish. Those that stayed started to move to cheaper places or renegotiate their rents. This led to an increased expectation for cheaper rents for better places,” he said.
Ellender added that they were quite busy for a time, but slowed down until several waves of teachers and businesspeople arrived mid- to late-2020. That cohort were looking for higher end properties and in response, his team completely changed the way they do things internally.
He added, “The market requires us to be more pro-active and target information better and quicker. This isn’t simple because it requires attention to staff behaviour, using information management and social media more intelligently.”
Despite the early exodus, he believes the 2021 rental market will begin to turn towards normality, which he sees as taking hold in 2022. He noted this all depends on border reopenings.
Ellender doesn’t see the sector changing much in the next few months as countries including Japan, Indonesia, Malaysia, UK, USA and Australia remain in lockdown. Once the doors are opened though he is very positive, as many of his clients have indicated a strong desire to return and expressed an eagerness to buy.
Founder of Lux Realty, Crispin Kirby, who set up his high-end property business during the pandemic, said the financial bubble in Phnom Penh has ensured continued luxury realty demand despite wider sector uncertainty.
“I set up because I believe there’s a gap in the market for luxury property. The high end wasn’t really affected by the pandemic, hence the reason condo prices didn’t really drop. Instead, there were just different deals to be made, such as longer guaranteed rental returns.” said Kirby.
He added, “My target is the high-end buyer because Cambodia seems to be slingshotting ahead of the rest of Asia. It was behind in a lot of ways, which had worked as an advantage in the real estate sector because there was a fresh platform to build on. I think the condo and commercial market will be booming by the end of 2021, especially as American companies are pulling out of China and looking at manufacturing here in Cambodia.”
In December, Phnom Penh’s rental market remained broadly unaffected by renewed fears caused by the country’s first local transmission, according to Realestate.com.kh
. “Apartments for rent in Phnom Penh are showing consistent median rental prices across the spectrum.One-bedroom units’ median rental price remains unchanged at $600, two-bedroom apartments’ median rental price saw a 5 percent decrease to $900 and three-bedroom units stabilised at a median rental price of $1,800,” the firm stated.
Source: https://www.khmertimeskh.com/50814018/rental-sector-businesses-share-positive-outlook-for-market-in-2021/