And other highlights from the nation’s resilient condominium sector performance in H2 2016
Driven by an active middle class, Cambodia’s property sector proved resilient in the second half of 2016 while shock-waves from President Donald Trump’s election and the Brexit referendum vote roiled global markets.
“Whilst the global economic outlook is one of short to medium-term volatility, Cambodia continued on its upward trajectory underpinned by investment from China as part of its ‘One Belt, One Road’ policy,” Knight Frank Cambodia country manager Ross Wheble reported, citing such high-profile investments from the mainland as the 550-hectare, USD1.5-billion Cambodia-China Friendship City north of Phnom Penh.
Sales of newly launched condominium projects in Phnom Penh in fact rose to 46 percent, which is 30 percentage points higher than the first half of 2016.
The popularity of mid-tier residential property projects seems to propel this growth, as several new launches cater to middle-class Cambodians. Many condos launched in H2 were priced between USD1,200 and USD1,800 per square metre.
The launches also offered enticements unheard of in older projects, including but not limited to lower price points, flexible payment schemes, long installment periods, attractive buy-back schemes, and the elimination of down payments.
Remarkably, developers devoted to landed developments are beginning to branch out into high-rise, mid-tier residential projects. These include Borey Peng Huoth, with their 900-unit Star Polaris high-rise homes, and Borey Toul Sangke, with their 205-unit condo project in a borey complex in Russey Keo district.
In a more humbling turn of events, none of the 3,184 units monitored by Knight Frank to reach completion by Q4 2016 did so. Ninety-eight percent were rolled over to this year.
High-end projects still characterise 70 percent of future supply, the property consultancy predicted. Several launches in H2 have unit prices hovering above USD4,000 per sqm, with entry prices at USD2,368 per sqm.
While expatriates continue to make up 80 to 100 percent of tenants in condo buildings, Wheble emphasised that domestic demand will remain a growth area. “Whilst foreign investment continues to shore up economic growth in Cambodia, it is interesting to note that domestic investment has taken a leading role during the past few years, and 2017 will be watched with much anticipation.”
Phnom Penh now has 3,033 units in its condo stock. Knight Frank noted that 54 projects were added to the condo supply last year in H2. By 2020, around 25,544 condo units will be added to the residential market.