Navigating a Stagnant Market: Location Remains Key for Selling Houses in Cambodia

• 24 July 2023
• Local News
• 1519 Views

As the residential real estate market in Cambodia enters the midpoint of 2023, it faces intensified competition and weakened demand. Sales in the sector have become increasingly challenging, with only a select number of condominium and landed property projects in prime locations managing to maintain or slightly increase their asking prices, according to CBRE Cambodia’s Mid-Year Review 2023 Market Insights.

During the first half of the year, the market witnessed the completion of three new condominium projects, adding over 1,600 units to the pipeline. Additionally, ten project completions contributed more than 4,600 units to the total supply. By the end of this year, the condominium supply is projected to reach nearly 55,000 units, marking a 16% year-on-year increase.

“While the market may be experiencing a slowdown, sales are still happening for projects that are positioned correctly,” stated Kinkesa Kim, Deputy Managing Director of CBRE Cambodia. Factors such as price, location, project quality, developer track records, and project size play a pivotal role in driving sales success.

In the realm of landed property, the first half of 2023 witnessed the lowest number of project launches in the past five years, with only eight projects introduced compared to the peak of 88 projects in 2020.

Quoting sale prices for all unit types, except for linked houses, have adjusted downward between 2% to 5% compared to the end of 2022. Year-on-year, the quoting prices for these unit types have experienced a significant decline ranging from 17% to 23%. In contrast, linked houses have seen a 6% increase in quoting sale prices over the last six months, with a slight adjustment of -1% year-on-year. The affordability of linked houses has made them more appealing to a broader base of local homebuyers.

“Despite efforts to provide competitive prices, flexible payment terms, and innovative projects, over 280 landed property projects in Phnom Penh still have unsold houses,” continued Kinkesa. Slow sales progress can be attributed to factors such as reduced household income, inflation, higher interest rates, and increased competition not only among developers but also with distressed sellers in the secondary market.

As the residential sector navigates these challenges, developers are actively seeking ways to adapt and attract buyers. The focus remains on providing competitive pricing, flexible payment options, and introducing innovative projects that resonate with the evolving needs of homebuyers.

Overall, the residential market in Cambodia continues to evolve, requiring developers to remain agile and responsive to market dynamics, ensuring long-term success and sustainability.

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