Phnom Penh condo supply hits 30,000 in third quarter

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The average per-sqm prices of condominium units in July-September were $2,750 for ‘high-end’ , $2,050 for ‘mid-range’ and $1,460 for ‘affordable’. Hong Menea

Two large condominium projects were completed in the third quarter of this year, adding 1,586 units to Phnom Penh’s supply, 5.6 per cent more than in the previous quarter, raising the total to about 30,000 as of September 30, according to a new report published on October 12.

CBRE Cambodia, the local affiliate of US commercial real estate services and investment firm CBRE Group Inc, listed the projects as The Peak – near Koh Pich Island – and The Gateway – along Russian Federation Boulevard (Street 110).

Compared to April-June, occupancy rates in the third quarter saw a “sharp decline”, sales prices fell an average of 1.8-to-three per cent and rental rates of 5.6-7.8 per cent, the real estate firm said, pinning the downswing on the Covid-19 crisis.

CBRE Cambodia categorises condominium projects as “high-range”, “mid-range” and “affordable”.

It said the average per-sqm prices of condominium units in July-September were $2,750 for “high-end”, $2,050 for “mid-range” and $1,460 for “affordable”.

For reference, a July 6 CBRE Cambodia report indicated that the equivalent rates in the January-June period were $2,802 for “high-end”, $2,113 for “mid-range” and $1,492 for “affordable”.

On the third-quarter rental market, “high-end” units averaged $11.40 per sqm per month, “mid-range” units went for around $9.40, and “affordable” units were around $7.90.

The earlier report listed the equivalent rates in the January-June period as $12.30 for “high-end”, $10.10 for “mid-range” and $8.40 for “affordable”.

Kim Kinkesa, senior manager of research and consulting at CBRE Cambodia, told The Post on October 13 that it would take at least six months after the reopening of the broader economy for condominium prices and the overall market in the Kingdom to rebound.

She highlighted that Covid-driven restrictions on cross-border travel have severely affected the domestic condominium market, shocks further intensified by its heavy reliance on foreign clients.

“The slowdown in global economic growth and travel constraints have led to a steady decline in the Cambodian condominium market during the Covid-19 crisis,” she said.

The study revealed that four other projects scheduled for completion in the third quarter have been postponed to next year.

CBRE Cambodia Residential Sales and Leasing director David Pen said: “Construction delays caused by disruption to regional supply chains have meant many project completions again face delays.

“Considering the current fragility of the rental market these delays can be seen as positive, allowing time for the possibility of a recovery of demand to materialise.

“Attention has now turned to the potential implications of the disruption caused by the possible collapse of Chinese real estate developer, Evergrande, and the potential knock-on effects to construction financing in a market already facing weakened investor demand,” he said.