Industry insiders have stated the rising level of unemployment will hurt demand for the local real estate market, which has already been hit by the global COVID-19 pandemic, but should see an uptake if the virus situation is resolved within 12 months.
Georg Chmiel, executive chairman of Juwai IQI, told Khmer Times yesterday that rising unemployment and a reduction in earnings could reduce domestic demand for real estate in the Kingdom.
Georg added that foreign purchases in residential real estate demand is likely to be somewhat weak until Chinese and other Asian buyers can more freely travel to Cambodia.
The residential real estate market may escape relatively unscathed compared with those of some other countries. For example, in Australia, some analysts are expecting prices to fall as much as 30 per cent. “We look forward to the relatively early return of Chinese buyers, which should support prices and employment in the construction industry,” Georg said.
He said Cambodia is in an enviable situation when it comes to the health impacts of the COVID-19 virus, but it is too early to know whether the financial effects will be nearly so benign. The country seems to have avoided a large-scale outbreak.
“Cambodia’s largest trading partner and largest foreign property investor, China, is also one of the first countries to get back to normal. Cambodia has earned a reputation for safety, economic stability and as a steadfast friend to China through this pandemic. The Kingdom has also strengthened its bilateral relationship with China through cooperation on COVID-19,” he added.
Chandy Mann, country head of Juwai IQI Cambodia, recently said that a better economic situation in China will see a positive impact on the Cambodian economy, especially the real estate market.
“This is a good sign for Cambodian real estate, especially in the condo segment. According to Juwai, Chinese investors are now looking again at investing in property outside their own country. So, we expect to see those investors come to Cambodia.”
The International Monetary Fund said that rebounds in economic activity in China and major markets in 2021 will improve Cambodia’s growth outlook next year.
Grant Fitzgerald, Independent Property Services’ country manager in Cambodia, was recently quoted by Forbes as saying that the key influencer on the Cambodian real estate industry will be the length of time it takes for the world to get complete control of the virus.
“If things return to normal in the next three months, I would expect property prices to be almost unaffected. If we are looking at a 12-month time frame or longer (which is quite likely), I believe we will definitely see a decrease in property prices, with some sectors being affected more than others,” he said.