A seeming glut of condominiums on the Phnom Penh residential market should not be cause for much naysaying, and grim prospects for the Cambodian property sector are overstated, a leading property analyst in the country said.
In an interview with The Phnom Penh Post, Simon Griffiths, senior associate director at CBRE Cambodia, said that the number of condominiums in Phnom Penh’s residential supply is “not reflective of the entire situation.” Real estate commentators should take a more rounded approach to the market and take into account gains in the sectors of retail, office space, industrial space, and tourism, among others.
“What has changed from five years ago, when demand outstripped supply in almost all sectors, is that there is more built environment now,” Griffiths told the Post. “You cannot just launch a condo and expect to succeed, it is a more competitive market place and that is good for consumers.
“There is still room for growth. It’s still on an upward trajectory but at a slower pace than that experienced over the last three years,” he added.
Earlier this year, Knight Frank had predicted a 723.5 percent increase in Phnom Penh’s condo supply pipeline by 2020, stoking fears of a bubble implosion. Prices in the Cambodian capital slipped from USD2,843 per square metre in the first quarter of 2016 to USD1,823 per square metre in the second quarter, a 35.8 percent drop.
The situation in the Khmer kingdom is no longer a case of “build it and they will come,” Griffiths said. “Developers who are going forward need to be ahead of the curve and produce developments that fill the gaps in the market, rather than reproduce what is already there.”
Home buyers may yet see competitive price points by the second quarter of 2018, he said, as developers mull “enticing deals” in the run-up to the general election that year.