Current Status & Future Projection of Real Estate Market in Flood Prone Region of South Phnom Penh

• 19 January 2021
• Local News
• 4608 Views

Before October 2020, Mrs Si Chantha made a reasonable income by selling coffee and drinks in front of her house in a large borey around the Kuor Srov roundabout, in south Phnom Penh. Mrs Chantha could do so well thanks to many residents having moved into thousands of houses in the newly-built borey.

However, her income has significantly dropped since then after many owners decided to leave their homes, transforming the former bustling borey into a silent neighbourhood.

She said many houses are now on sale and some business owners have already closed their shops after the flood.

“It was sinking to the thigh in front of here,” said Mrs Chantha while pointing to the road and the flood stains on the buildings.

Many sangkats in Dangkor district, in southern Phnom Penh, were flooded by heavy rain between early October and mid-October last year, forcing many families to evacuate. The floods at that time also affected many houses in the boreys situated in that district.

Mrs Chantha said, “If you saw the water coming, you would be scared. Rescue workers brought us outside. I left for only three days, I was too scared to lose my belongings, so I came back. Frankly speaking, the water receded after half of a month.”

In the same borey, many shophouses had already put up business signs before the flood, such as Korean restaurants, gold shops, and bars. However, they have never reopened after the flood, according to Mrs Chantha.

Passing Mrs Chantha’s house, about 150 metres from one of borey’s main markets, which have not yet opened for sale, many shophouses have been put up for sale, and some have been labelled as ‘urgent sale” or ‘sale with loss”.

One house owner Sotheavy said she had been trying to sell her house since mid-November last year, and so far there have been only a few calls, but has never reached a deal.

When asked if she was selling her house because of the October floods, Sotheavy seemed reluctant to say it is the main reason, but she said: “I have another house and it is difficult for to maintain this one.”

A sales agent at Borey Piphup Thmey Kuor Srov 3, who declined to be named, said that all houses at the site had been sold out. The agent added that many of the houses are on urgent sale now maybe because the owners want to resell for profit.

The agent said knee-deep floods inundated houses there in October last year, but she said the company could not guarantee that there will be no flooding next year.

Another sales agent of a nearby borey said houses there were soaked one metre deep in water during the floods. However, the agent said that only about 10% of the houses have been put on urgent sale by the owners, is mainly due to the economic crisis caused by the pandemic rather than the flood.

Mr Sorn Seap, Founder and Director of Key Real Estate and also a local real estate expert said the projects that have already been developed will be strongly affected as people obviously saw that they were flooded.

“The price will drop for at least one or two years. It will be tough for the developers to sell the property at the price they want. Besides, the number of transactions will also reduce, as some investors began to hesitate to invest in the area despite its high potential,” said Mr Sorn Seap.

“Those investors will wait and see the progress of infrastructure developments and flood prevention measures by the government before deciding to invest in that area once again” he added.

Given that, Mr Seap is optimistic that the area will recover very soon as long as the government completes upgrading infrastructure.

“No matter what, as for the land, it still has great potential because most flooded areas are in Dangkor district. This district has been attracting many projects with many massive infrastructures being developed there such as the second and third ring roads, as well the new airport,” said Mr Seap.

Mr Chrek Soknim, President of the Cambodian Valuers and Estate Agents Association (CVEA), said that the resell of many houses may be due to various factors such as selling for profit and the decline of the economic situation, among other reasons.

At the same time, he also agreed that the flood factor is also one of the reasons, which requires borey owners or property developers to reconsider the safety measures to gain clients’ confidence back.

“It is very important, as water is related to safety. When the borey is flooded, it is not safe to live in. So, borey owners have to think of new security systems and set up a new rainwater storage system. [If successfully do so], things will get better,” said Mr Soknim.

Another real estate analyst and CEO of Pointer Nguon Chhayleang also believes that in order for the market in that area to catch up with its pre-flood potential, it requires the cooperation of both project developers and the government.

“Partial protection against flooding is the role of the project owners, such as the installation of more drainage systems within their project. Another major part is the government’s effective mega or master drainage system,” said Mr Chhayleang.

“Let’s say if there are many drainage systems in the borey, but the master infrastructure around the area is not effective in coping with the flood, the borey will be soaked in the water anyway. Thus, both parties shall will work closely together,” he added.

Construction & Property Magazine contacted the relevant government institutions for comments regarding the future plan, one of which is the Dangkor District Chief Kim Nheb.

However, Ms Nheb could not comment on any the flood management project in Dangkor district as it involves many institutions including the Ministry of Water Resources and Meteorology and the Ministry of Rural Development.

Met Meas Pheakdey, spokesman for Phnom Penh Capital Hall, also told Construction & Property Magazine that Phnom Penh Capital Hall and relevant ministries have been considering solutions to avoid future floods.

“We have experienced our problems, so we are now thinking of something new, but for detail, we need time to discuss more,” said Mr Pheakdey.

• Analysis
• Business and Market
• Projects Development