Real Estate Market Lessons from a Year of Pandemic & Future Trend Projections

• 29 March 2021
• Local News
• 2732 Views

The COVID-19 pandemic put quite severe pressure on the real estate market in Cambodia in 2020 with a moderate drop in the number of transactions. Due to the recent surge in the community outbreak, the pressure on the market in 2021 remains high or even higher. According to expert observations in recent months, the number of buying and selling transactions has declined significantly.

Given these repeated waves of local transmissions, what lessons has the market learned and how will the real estate market adjust itself during the post-pandemic period?

A Construction & Property Magazine reporter conducted online interviews with three experts, including the President of Cambodian Valuers and Estate Agents Association (CVEA) Chrek Soknum, CEO of Century 21 Cambodia Grace Rachy Fong, and Head of Country of IQI Cambodia and CVEA Vice-President Man Chandy.

According to the analyses of the three experts, lessons and future projects are summarised as followed:

1) Always Beware of Cash Flow

Before the pandemic, project owners could easily build any project with bank loans and instalments from buyers. However, COVID-19 has severely affected buyers’ incomes. The banks have also tightened loans both for buyers and developers. These factors put major pressure on the project owners’ financial status. Thus, from now on, each developer will use more personal cash flow to invest in projects. In the long run, this will eventually make property prices more expensive as the investment capital is limited.

Meanwhile, for buyers, the most important lesson learnt from the pandemic is how to observe the developers. In this period, you can easily tell which has the strongest financial status through the continuity of construction and sale activities.

2) Check Your Pocket Before Investing, Low Price Does Not Always Mean Opportunity

The pandemic period is definitely a good opportunity to buy low-priced real estate, but buyers have to take into account their cash flow and the potential of the property in consideration before purchasing. With limited cash, it is quite risky to invest as it is hard to sell the property at the moment. Most importantly, one should not invest with a bank loan, as you will never know when you can sell back your property.

3) Digital Marketing is the Trend for Future Market

Due to social distancing, the online market is becoming more active, which will gradually change consumer behaviour. Technologies such as 360-degree photos have been used in the real estate market. So, embracing technology usage is a must for both developers and project owners in order to seize opportunities.

4) Do Not Give Up, Look for Long-term Opportunities

Though the market is stagnant at the moment, both investors and project owners should not give up, as the market will grow exponentially after the pandemic. The most important driving force of market growth is the ongoing infrastructure projects. With better infrastructure, real estate prices in those areas will also go up, and more importantly, foreign investors will also be more interested in investing there. Besides, the political stability of neighbouring countries is also another factor encouraging investors to consider Cambodia. Lastly, as vaccinations are continuing, the market is also expected to return to normal soon enough.

5) Maintain Good Communication and Update Knowledge

This difficult time is a good time to learn new skills. For example, buyers need to know how to study observe and analyze the real estate potentials. Project owners or sales agents, on the other hand, should continue to have good relationships with customers even if there are no transactions at the moment.

• Advertorial
• Knowledge and Key Success
• Business and Market