Cambodia’s Construction & Real Estate Sectors Exhibit Slower Growth in 2023, Navigating Economic Dynamics

• 5 February 2024
• Uncategorized
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The landscape of Cambodia’s economic sectors, particularly construction and real estate, witnessed a tempered growth trajectory in 2023, as outlined in the National Bank of Cambodia’s report released on 29 January.

In 2023, the construction sector experienced a growth rate of 1.1%, a measured pace compared to the 2022 figure of 0.5%, indicating a cautious upward trend. The report attributes this growth to strategic investments in public infrastructure, including bridges, airports, and expressways. Noteworthy was the 4.7% increase in imports of construction materials and equipment from the previous year. Despite a one-time surge in the construction surface and investment cost of approved projects, the total number of construction projects witnessed a decrease of 20.5%.

Real Estate Sector: The real estate sector mirrored a comparable trend, exhibiting a growth rate of 0.5% in 2023, a marginal increase from 0.2% in 2022. Home sales, encompassing apartments, and twin and single villas, experienced a decline of 49.7%. In contrast, condo sales showed resilience with a 2% increase. The Residential Property Price Index (RPPI) saw a decline of 2.4%, with Phnom Penh registering a 3.2% drop, while provinces marked a 3.2% rise.

In its comprehensive 2023 Macroeconomic and Banking Progress Report and 2024 Outlook, the National Bank of Cambodia shed light on the construction sector’s subdued growth, propelled by public infrastructure investments, while foreign investments in real estate exhibited a dip.

As Cambodia navigates the nuanced dynamics of economic growth, the measured expansion of the construction and real estate sectors in 2023 underscores the strategic nature of public infrastructure investments and the resilience of certain segments within the real estate market.

• Economy and Finance