Why Some Condo Projects in PP Remain Successful During Covid-19?

• 14 March 2022
• Local News
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By Harbor Property

During the prolonged Covid-19 pandemic, some condo projects in Phnom Penh have been struggling to sell while some others were postponed as most developers are heavily reliant on foreign buyers.

However, some condo projects tend to perform well even during the Covid-19 pandemic. Why?

Mr Ear Chakriya, CEO of AP Real Estate, told Harbor Property that the reason why some condo projects remain successful even during the Covid-19 pandemic is that they are unique. Good location, discounts, and flexible payment terms are also key factors.

“Projects located in the city centre adjacent to big roads with high population density, restaurants, coffee shops, schools, hospitals and markets has high potential,” he said.

“Discount and flexible payment options are the other two key factors. Most Cambodians cannot afford to make full payment or high instalment of US$2,000-3,000 per month. Thus, clever developers have adjusted the instalment to only US$500-1,000 per month, which is very affordable for local people with a salary of over US$1,000 per month,” he added.

According to CBRE Cambodia Q4 2021 report, half of all expected condo projects to complete in 2021 were delayed into 2022. In Q4 of 2021, only one project reached completion – TK Star International. Widespread delays are a true reflection of where sentiment lies on both the demand and supply sides.

2022 will see robust competition within the segment as several of the delayed projects will restart simultaneously, leading to a significant increase of 42% in total condominium supply. Sales will continue to struggle until reciprocal travel routes open as demand for condos has been driven substantially by foreign buyers, says the report.

The report notes that to stand out in the crowded market, developers are experimenting with product differentiation around both safety and wellness as well as varied sale strategies from raising agent commission rates up to 12% including home appliances or furnishing in their offering.

In the next 5 to 10 years, it is believed that more Cambodian people will change their mindset from buying housing in Borey in the suburb to buying a condo in the city centre due to the traffic jam and high housing prices in the CBD area.

Mr Ear Chakriya said that the rising population in Phnom Penh will cause heavy traffic congestion in the city. This will prompt professionals to change their mindset by choosing to live in a condo to reduce travelling time from their suburban homes.

Condo with a price under US$100,000 per unit in the city centre will become more affordable for Cambodian compared to houses with prices between US$150,000 and US$300,000.

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