Is there a Huge Demand for Condominiums in Cambodia?
In recent years, Cambodia has seen great progress in the real estate development sector including an increase in the development projects for more buildings that serve retail purposes, office space, residential, etc. According to CBRE’s report on the real estate market in the third quarter of 2020, it shows significant improvement along with an increasing demand for condominiums within the capital city, Phnom Penh. Condominium units as supply responding to the increasing demand will grow from 45,000 units in Q4 2022 and may increase to 65,000 units by Q4 2023. Besides the increase of supply units, the technology and quality of these condominium units are also improving with every new project. However, condominiums are not the only residential real estate that is landing new projects in Cambodia. To learn more about the potential of a huge demand for condominiums in Cambodia is relevant or not, keep reading down below to find out more.
What is Real Estate development in Cambodia like?
Cambodia’s condominium sector covers a diverse type of housing from studio units to duplexes, flats, penthouses, etc. However, these types are not as popular among the people living in Cambodia but can be found at certain locations in Phnom Penh and some provinces. The common and popular residential housing includes shophouses, villas, boreys, and of course, condominiums which have gradually become more popular among Cambodians in recent years. From 2020 to 2022, the development of residential real estate experienced certain slowdowns but ultimately had an upward trend in its market prices and the number of approved projects. Due to the gradual flow of FDIs from foreign investors, mainly from China, and new development plans around urban and rural areas, more and more real estate development projects have become a driving factor in boosting the countries’ economies and investment prospects.
How prominent are Condominiums in this sector of development?
In earlier years, condominiums were very popular among foreigners who search for temporary as well as permanent residences in Cambodia. However, in the last few years, locals have started to grow interested in condominiums as well. The increase in locals’ interest is a product of a new inflow of FDI, an affordable fund for investment or ownership along with the housing lifestyle preference of the newer generation. Consequently, the supply of condominiums in Phnom Penh accounts for more than 36,000 units reported in the third quarter of 2022. Moreover, despite the impact of the pandemic, condominium development projects were not postponed. Quite the contrary, more than 900 units of condominium development projects even began resuming their operations in 2022 when the spread of the pandemic remains at large according to the Q3 2022 Market Insights by CBRE. Most importantly, new condominium projects are to be completed in 2023. Here are a few projects you can look forward to in 2023:
- Morgan Enmaison, a five-building project with over 102 floors combined, located in the Chroy Changvar district
- Royal Platinum Condominium, a 28-floor project with a total of 851 units and a combination of 50 shophouses in Boeung Kak 1 commune
- La Vista One is another project in the Chroy Changvar district with a total of 1,600 units awaiting foreign and local residents
Reasons behind the increasing demand for condominiums
Amid the continuous development in the real estate sector in Cambodia, the need for affordable housing also grabs not only the government’s but developers’ attention. Condominiums in Phnom Penh are classified into “high-end”, “mid-range, and “affordable” to respond to the demand suitable for people in every income group. Besides, the price of one condominium unit compared to a villa or borey house is so much more affordable considering the average Cambodian’s monthly income even with a mortgage loan is taken into consideration. Other than this, the increased demand for condominiums also comes from easy access to everyday life convenience. For instance, most condominium projects are located within the proximity of the city center making it all so much easier to commute to and from their workplace, supermarkets, malls, hospitals, nightlife, and other entertainment centers. Most condominiums also offer these attractions within their project, making it even easier for people with busy schedules to make time for their daily necessities. Adding on to that, they can also have access to modern and up-to-date technology, and facilities such as gyms, pools, spas, etc while enjoying a fully furnished living space and 24-hour security. All the efficiency and convenience condominiums offer became a very attractive package to locals and also foreigners, thus increasing the demand for condominiums in Cambodia.
What should you look for before investing or owning a condominium in Cambodia?
Even though investments in a condominium are less risky and do not require as much investment funds as other types of residential real estate, it is advised that before investing research on the project is done. To help you with your research, here is a list of a few criteria you should check out before investing in the project:
- Developer Credentials: it is strongly encouraged to conduct careful and detailed research on the developers of the projects: from their previous projects, completion, and project success rates, previous and current operating partners, conflicts or lawsuits, developing infrastructure style and material used, etc are some things you should know about the project developer
- Project Location: when it comes to real estate projects, a good and potential location matters a whole lot, therefore choosing the right location with an established market, population, and also future development plan will ultimately result in more benefits in the investment
- Financial Projection: another important aspect to consider is finance. It is advised that before making an actual investment, you know the required fund for investment, the value of the project along with your financial budget and plan if it correlates with the expected expense or not
- Percentage of ROI: however, not every investment will be a success, some will fall short of your expectation or even result in a loss. To prevent this, before investing you should carefully calculate the percentage of your return on investment. Whether it is at a rate you can risk your investment in
Real estate is considered a potential market to grow and develop especially with a huge demand for condominiums in Cambodia in recent years, an inflow of investments from foreign investors, as well as local investors, positively affects the growth of the economy. A condominium is a residential type listed as among the top desired housing considering its affordability, access to conveniences, and prospects for future investment that guarantee an equally high return of investment rate. If you are among many looking for opportunities to invest or own a condominium, you may seek the CBRE team for insightful advice and help on your endeavor.