Currently, there are more than 140 Borey projects and 60,000 units under construction in Cambodia due to increasing demand according to the CBRE Cambodia’s Managing Director James Hodge in an interview with Khmer Times.
“Research indicates that there are currently more than 140 Borey projects currently under construction around Phnom Penh. The projects include more than 60,000 units presently under construction.”
Hodge indicated that there is large competition due to the increase in active developers creating Borey developments and other housing units.
“This has created the environment for greater innovation in the concept, design, marketing, and financial arrangements around the Borey market as developers compete ever more fiercely for buyers.”
Cambodians increase buying real estate within Boreys due to the rise of purchasing power according to Prime Minister Hun Sen in an interview with the Khmer Times. He added that this will continue to increase since the purchasing power of local rich Cambodians are growing, especially since locals don’t have to invest in foreign banks.
“Construction work on Boreys by Peng Hout, ChipMong and New World to name a few, are progressing as normal as there is purchasing power among the rich in Cambodia.”
Prime Minister Hun Sen continued that purchasing power declined before, decreasing the investment opportunities of locals in real estate. However, since more Cambodians are putting their money in local banks, Boreys and other real estate developments are increasing in number due to the growth of local investors.
“So the rich people now do not have to invest abroad as before and their money is in local banks. Some people buy a house, some buy and sell for profit when the price goes up, but others think that if they have five children, they buy for their children and take a break to allocate to their children. This is good for the economy as the construction sector is still very active.”
Gated communities or Borey projects are one of the key real estate developments that provide numerous amenities for locals and foreigners alike. CBRE Managing Director Hodge even indicated that Borey projects allow developers to adjust with the quick change in the market demand.
“The great thing about the format of Borey development is that developers can react relatively quickly to changing trends in demand. Beyond the purchase of the land plot, the developers are rarely committed to a large volume of speculative development, having usually sold a good proportion of the inventory before construction commences, and being able to adapt and adjust the phasing, timing and scale of their projects more readily than in the case of high-rise projects.”
Besides demand in construction, according to CBRE research in the first quarter of 2021, they recorded that the sales of Borey projects continues to increase in demand. In Q1, there was a 2.1% average sales price increase for flat houses and 2.2% increase for twin villas compared to the 2019 market. Not only that but shop houses had a 3.9% increase and villas had a 4.3% growth.
Moreover, according to real estate agency Knight Frank, projects for condominium units are currently on the rise with an expected 53,512 units to be completed by the second quarter of 2023.
KH