The post-covid era of Cambodia real estate is on the horizon. Despite the impact of Covid-19 on major economic sectors, the Kingdom’s efficient mitigation of the crisis has paid off.
Together with tourism, the real estate market is set to bounce back stronger in the coming year.
As early as now, it would be wise to take note of market demands and trends, guiding your decision-making and asset preparation as the whole world finally moves towards the post-pandemic era.
Strong Demand for Residential Properties
From the Western First World to the Asia-Pacific Region, the demand trends within real estate have swerved towards residential properties with Cambodia being no exception.
Still, the demand was high even prior to the pandemic. This has been especially true of Phnom Penh, where you’ll find plenty of expat workers as well as locals from provinces living in the city for work.
While a single company would need only one office or retail space, the number of expat staff would need almost the same quantity of residential units.
Understanding market needs at a holistic level would reveal this consumer trend, which gained more traction when the pandemic struck.
In 2021, there was a shift in how people all over the world viewed their homes. While a portion of the market then considered their home as an investment, the perspective is now of the home as the primary focus of everyday life.
Oisin Hanrahan, CEO of Angi, pointed out that no longer are home improvements treated like a project to increase the value of a property; they are now geared towards meeting needs and improving quality of life for the household members themselves.
Homeowners nowadays also prioritize being able to spend more time with family in a balanced remote work environment as part of the post-pandemic reality, observed Paul Ryll through an expert opinion-focused article from Forbes. Ryll is the owner of Oscar Mike Mobile Appraisals.
With home as the hub of modern-day living, and the anticipated continuation of workplace flexibility, residential property demand will widen in scope as potential buyers are able to stretch their location parameters. David O’Reilly of the Howard Hughes Corporation also pointed out the added factor of the millennial generation now at the peak of home-hunting.
In line with the said demand for housing and community connectivity, suburban areas even along the outskirts of Phnom Penh and along national expressways are attracting plenty of attention, and for good reason.
Growing Potential on Phnom Penh Suburbs
By the year 2035, Phnom Penh will be expanding the city radius by 100km. This move has been dubbed the Phnom Penh Master Plan on Land Use 2035.
It is a joint project by the Royal Government through the National Council for Sustainable Development (NCSD) and Ministry of Environment (MoE) together with the Global Green Growth Institute (GGGI).
Thus, as of today there are already numerous developments and high-potential investment properties in areas like Preaek Phnov and Preaek Aeng, which are close to the Phnom Penh-Kandal border on the north and east, and Takhmao and Areyksat, areas already part of Kandal Province.
The case is similar for Dangkao, a district in outer Phnom Penh known for the Choeung Ek Genocidal Center, or the Killing Fields.
Certain lands in Kampong Speu, a province more than 30km west of Phnom Penh, are also presented as potential investment properties by Malay Nop, Phnom Penh Branch Manager of IPS Cambodia.
Those close to National Road 4, which runs from the edge of the Phnom Penh International Airport through Kandal Province and into Kampong Speu, are valued at an average of $30/sqm. Meanwhile, lands positioned within 100km of the Chaom Chao Roundabout in Phnom Penh are valued at $5 to $10/sqm.
Kandal Province was also commended recently by Economy and Finance Minister Aun Pornmoniroth for its budding real estate investment potential. Other areas of interest, he added, are Sihanoukville Province, Bavet town in Svay Rieng Province, and Poipet town in Banteay Meanchey.
Aside from offering more choices for the real estate consumers, especially those interested in master-planned communities with incorporated amenities within a residential development, this expanded urbanization also means Cambodian real estate is now catering to more of the local population.
Moreover, Pornmoniroth emphasized that these suburb properties are brimming with potential, considering the current low prices ideal for long-term investment.
High-end residences and lifestyle convenience will soon no longer be a trademark of big cities like Phnom Penh and Siem Reap.
Rather, these are anticipated to become staple features of these outer suburban areas. Ventures like commercial complexes, institutions and organizations, and serviced-based establishments will also be sure to follow and flourish, serving the rest of the Kingdom’s population.
Increasing Number of Local Buyers
The growing scope of real estate opportunities, for investors as well as buyers, was further emphasized by the pandemic.
“Before Covid, overseas investors would come to purchase condos for investment,” Nop shared, “With the crisis, we don’t have those overseas investors anymore but a growing number of Cambodian buyers looking to buy properties under market value, particularly lands, landed properties, and boreys.”
While this shift from expat or overseas to local demand was a challenge for developers with foreign buyers in mind, they were able to rise to the challenge and adapt their sales and marketing strategies to meet local preferences, the Asia Property Awards reported.
The decrease in international customers led to a price drop, due to intense competition among developers to entice local buyers and investors.
Why 2022 is the right time to buy property
With Siem Reap tourism and business operations already in full swing after almost a two-year hiatus, these same developers have signaled price increases over the next 12 months.
This is to be expected, said Ethan Liu of Vue Aston, a renowned condo development in Phnom Penh.
Liu explained, “The larger market is already rising, and some developers will adjust the falling prices back to pre-pandemic values.”
As per Nop, the current market is on the buyers’ side. As long as the developer in question is well-known with a good property management and pricing record, and location has high prospects, buyers should take action now.
According to Peter Guboglo, a real estate investment specialist in Cambodia, the pandemic-induced price policies are advantageous for locals and overseas buyers alike.
With regards to residential properties, he added, “A product’s value proposition is helped by the demand. Now that condos are more accessible to not just expats/foreigners but more so to Cambodians, the more stable and less prone to risk the market is going to be.”
Foreign buyers are now also more valuable than ever before to developers who may have been struggling with longer payment terms over the past two years just to accommodate the capacity of local consumers.
Positive Prospects All Around
In light of these trends, the Kingdom’s real estate market is clearly brimming with good prospects for property investors as well as budding homeowners, both from the local population and from overseas.
The steady comeback of international tourism spells good news for those with commercial ventures as well as the hospitality industry, while the after-effect of hybrid work setups and other impacts of the pandemic have significantly expanded consumer options for those seeking to buy a house or unit residence.
While the country has aimed for a complete relaunch by 2025, it’s plain as day that the timeline is progressing quickly for tourism and other major economic sectors.
It’s clear that 2022 will be the best year for pushing through with that major real estate purchase. IPS Cambodia offers Property Valuation and Management services to address specific concerns you may have and ease your woes about maximizing and sustaining productivity once you’ve acquired a new property.
In addition to assessing market trends, it would be wise to enlist professional help as you maneuver the post-pandemic era of real estate in Cambodia.