As of Q4 2019, Mid-tier landed housing comprises 51% of the total landed housing market in Phnom Penh, according to a report published by Knight Frank Cambodia. The mid-tier segment is followed by the Affordable housing segment at 38% market share and the High-end segment last at 11%.
The mid-tier segment of the market has largely been the focus of borey developers, and even some condominium developers. The shift in developer attention can be largely attributed to the increasing demand of Khmers for more affordable housing and their local valuation of land as a source of wealth security. Similarly, the saturation of the condominium market has prompted some known condominium developers to tap into the emerging mid-tier housing market. And with COVID-19 still heavily restricting travel, the local mid-tier market has been further emphasized in its importance within the larger Cambodian real estate market.
According to Knight Frank’s report, 11 new boreys were finished in the later half of 2019. These new developments contributed a cumulative 4,654 units to the now existing supply of at least 55,932 landed housing stock.
In terms of location, only 4% (2,012 units) of the total landed housing market reside within the city center whilst the remaining 96% (53,920) are found within Phnom Penh’s inner city districts, largely due to higher land costs, the report says.
Knight Frank’s report indicates that a 26% bulk of the total landed property stock resides in Sen Sok. This is followed by Dangkor and Kamboul at 12% each, while Russey Keo follows close at 11%. The remaining landed property stock are distributed across Mean Chey (10%), Chbar Ampov (9%), Por Sen Chey (7%), Chroy Changvar (6%), Prek Pnov (3%), Chamkarmon (2%), with Daun Penh and Toul Kork having only 1%.
The current stock of landed housing is expected to grow in the coming years as 16 new off-plan projects were launched in H2 2019 alone. Knight Frank projects that an additional 22,000 units will come online by 2022 – 64% of which are classified as Mid-Tier. Knight Frank also reports a commendable sales rate among surveyed developers in 2019, ranging from 40% to 50%.
Cambodia will likely see a resurgence in real estate activity once the pandemic-induced fears subside. At the moment, however, the lack of international travel has expedited the developer shift towards delivering for the mid-tier of the market. According to Knight Frank, suburban districts will still be the preferred locations as they’re more viable to provide Affordable and Mid-tier housings, at the same time sustain a commendable sales rate whilst maintaining their profit margin.