The condo supply in Phnom Penh increased by nearly 19 percent in the last quarter of 2018, with 2,234 new units joining the market, according to CBRE’s latest report.
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Eight new projects were completed in Q4, CBRE said.
The mid-range segment – with the completion of projects like East View, Sky 31, and The View – saw the highest influx, accounting for over 40 percent of all completed stock in the quarter.
The affordable segment also witnessed a high influx, with 870 new units, 78 percent of which were located in Sen Sok district.
The report also points out that the largest condo project completed in the quarter belongs to the affordable segment. Sen Sok Town III added 468 units to the market, approximately 20 percent of the total supply to enter the market during the quarter.
Meanwhile, six new condo projects were launched during Q4, totalling around 2,000 units. Over half of the stock was launched by R&F Properties, which introduced R&F Glory (Phase 1) and R&F City (Phase 2), comprising 440 and 792 units, respectively, according to the report.
Again, the mid-range segment dominated the market, accounting for 1,232 units. New launches were seen in Daun Penh, Chroy Changvar and Meanchey districts.
Condo sales prices remained relatively unchanged, with an average quarter-on-quarter upward adjustment of less than 1 percent across the sector.
“Average sales prices have varied over the course of 2018, with the high-end segment witnessing a 1.5 percent upward adjustment, a minor downward correction in the mid-range prices, and an 8.4 percent rise in average affordable prices year-on-year.”
In spite of the large influx in new stock, condo rental rates saw minimal change over the fourth quarter of 2018. Rental rates remained stable in the high-end segment at $14.2 per square meter a month and approximately $11.5 per square meter a month for mid-range stock, a marginal quarter-on-quarter fall of approximately 1 percent in both segments.
Ann Sothida, director of CBRE Cambodia, said the upward trend in condo stock completion in 2018 is set to continue into 2019, particularly in the first and second quarters due to the delay in completions in the fourth quarter of 2018.
“Whilst this inflow of condo supply is a sign of strong market growth, fears of over-saturation within the condo sector in the mid and high-end segments persist.
“To date, this high level of new supply has not had noticeable effects on sales and rental rates within the sector,” Ms Sothida said.
In December, the Ministry of Land Management reported a 19 percent drop in the number of approved construction projects for 2018, with only 2,867 projects being greenlighted, compared to 3,052 last year.
Total investment in construction projects last year totalled $5.2 billion, down from 2017’s $6.4 billion.