The Mid-Year Review 2024 by CBRE Cambodia is an event that sheds light on the country’s economy and real estate industry.
During this exclusive gathering, CBRE experts delved into comprehensive insights and analyses of Phnom Penh’s development landscape, economic resilience, and transformative urban initiatives.
Major takeaways from the Cambodia Real Estate Market
Condominiums
The Cambodian condominium market has witnessed a slowdown in recent years. Here are the key trends:
- Fewer Launches: There has been a significant decrease in new condo launches since 2021. In the first half of 2024, only 3 new launches were recorded, all from established developers with lowered market positioning (affordable condos).
- High Supply: Despite the slowdown in launches, condo supply is still increasing due to ongoing completions. By the end of 2024, around 70,000 units are expected to be completed, adding to the existing stock. This high supply is putting downward pressure on prices.
- Price Adjustments: Condo prices have been suppressed due to the high supply. In the first half of 2024, a decrease of 6% was observed in mid-range condos and a 10% increase in high-end condos (compared to the previous half year). However, the high-end price point is still considerably lower than the peak years (around $2,400 per sqm compared to $3,000 per sqm previously).
Landed Properties
The market for landed properties (houses, villas) is also experiencing a slowdown:
- Similar Launch Trend: Similar to condos, there has been a decrease in new launches for landed properties, with the lowest launch numbers recorded in the last decade (only 2 in the first half of 2024). These launches were from established developers extending existing projects rather than entirely new developments.
- High Supply: Landed property supply is also on the rise due to completions from ongoing projects. By year-end, an estimated 170,000 units are expected to be completed, more than double the condo supply.
- Dominated by Affordable Segment: The landed property market is primarily driven by the affordable segment, accounting for nearly half of the market share. The mid-range segment holds around 40%, while the high-end segment makes up only 30%.
Overall Market Outlook
The Cambodian real estate market, particularly the condo sector, is facing challenges due to high supply and a slowdown in demand. However, there are positive aspects to consider:
- Competitive Prices: Cambodia’s property prices remain attractive compared to more developed markets, especially for condos in the central business district.
- Rental Yields: Rental yields in Cambodia are still relatively high (around 5.6% per year), making it an attractive investment option.
- Growth Potential: Cambodia’s urbanization rate remains low, indicating significant room for future growth in the property market.
- Foreign Ownership: Foreign ownership is permitted in Cambodia’s property market, opening doors for international investors.
Overall, the Cambodian real estate market appears to be in a period of adjustment. While there are short-term hurdles, the long-term potential for the market remains promising.
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