Condo supply sees slight increase

Sum Manet / Khmer Times No Comments Share:
The condo supply is steadily rising. KT/Chor Sokunthea

The supply of condominiums has kept increasing in the second quarter of this year, while the sale price for condos saw a very slight increase, compared with the previous quarter of 2017.

The condo supply is still low at this stage, with total supply expanding by 1,911 units to reach 6,109 by the end of the second quarter of 2017, an increase of 46 percent from the previous quarter.

The number is approximately double the supply figure during the corresponding period last year, according to the latest report from CBRE Cambodia sent to Khmer Times last week.

Only one condominium project was launched off-plan over the course of the second quarter. The project, on Chroy Changvar peninsula, has added 283 units to the supply pipeline.

“Overall, average quoting sale prices were broadly stable during the second quarter compared to the first quarter of 2017. An approximate 1 percent decrease in prices was witnessed within the affordable and mid-range segments, predominantly due to recently launched projects setting lower prices to target local buyers,” the report said.

It is worth noting that sales during the last two quarters have been slowing. While there has been little fluctuation in quoting sales prices for condominiums, some developers have started to employ increasingly commercial marketing strategies, including discounts on quoting sales prices of between 2 percent and 10 percent, the report said.

Prime condominium rents were broadly stable in the second quarter, compared with those in the first quarter. However, rents are likely to face downward pressure as more stock is completed over the course of the next 18 months.

“Average rents of high-end condominiums in prime locations were recorded at circa $16 per square metre per month, whilst those in the mid-end segment in prime locations stood at $13 per square metre. Affordable condominiums achieved rents in the region of $10 per square metre,” the report said.

“Monthly rents for prime one-bedroom units achieved between $800 and $1,500 per month, whilst prime two-bedroom condominiums rented at between $1,400 and $2,500 per month.”

When asked about the future prospects of sales being affected by next year’s elections, James Hodge, an associate director at CBRE Cambodia, said recently that it is likely that investors will display a weaker appetite for investment in the run up to next year’s polls as happens in all property markets when such events occur.

“We should expect to see a rebound in investment levels following the election, particularly from foreign investors. Continued economic growth, alongside Cambodia’s open economy and business friendly attitude, continue to give investors confidence in the property sector,” he said.   

“It is important that Cambodia builds professional capacity in its property market. This means greater clarity for investors in, for example, property measurement standards and the application of service charges.

“In addition, workforce skills should be developed to ensure a ready supply of trained property professionals.

“In addition, international benchmarking is increasingly important in a globalised property market where investors of different nationalities are trying to understand and operate within the Cambodian market, by allowing them to readily compare key market metrics with other countrys’ levels of understanding and that will improve and investment will be encouraged as a result. 

“Infrastructure improvements which facilitate greater connectivity across the country and the wider Asean region, as well linking Cambodia’s markets more closely to the global economy, will continue to help grow the property market by improving the prospects of people and businesses in addition to supporting economic growth,” he said.

“Effective property laws and their enforcement, including in the matters of finance, tax, planning and investment, will help to ensure all investors, occupiers and market participants have clarity about the impact of the choices they make,” he added.

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