Property prices buckle under COVID-19 pressure in September

Posted on October 21, 2021 | by Chhing Chhut in News | 1027 Views

Phnom Penh’s property market activity continues to be stifled especially in the month of September where daily cases picked up. As has been the trend, the rise in cases and the spread of the delta variant coincided with a dip in median sale prices and search queries for both new and existing condo projects.

It is important to note, however, that despite the recent rise in new cases in September, figures are still well below the peak experienced in July 2021. Cambodia’s vaccination drive and constant reminders of health guidelines have paid dividends in meeting its target vaccination of more than 80% in late September 2021.

The vaccination push, now focused on the younger demographic, has led to government officials mulling a full reopening of the economy – highlighting the country will be open to vaccinated tourists and investors.

Tourism plays a key role in Cambodia’s real estate market. According to the Asia Development Bank, the industry provides a significant 2.2 billion USD (11.5%) of GDP and employs almost 800,000 people. It is a large part of the economy playing a hand in how residential rentals (apartments/guesthouses/hotels) and commercial rentals (shopping/community malls, shophouse-based businesses) perform in a given period of time.

Allowing more visitors to enter the country – given safety measures are in place – will reintroduce the promise of growth that attracted foreign investors to Cambodia in the first place. The final decision to reopen is expected to be made public by late October 2021.

Sales prices

Sales prices for 1-bedroom and 2-bedroom properties saw a dip in September by as much as 5%. This may be attributed to the new daily cases of over 800 recorded towards the end of the month. Recorded sale prices noticeably decrease during months of daily cases peaking, causing concern and reservation from property buyers.

Standing out from the pack are 3-bedroom apartments, seeing a bump of 7% in median sale prices.

Overall condominium price trend

Unit Type	Median Price Per SQM	Median Unit Size
1-bedroom	$1,761 (-5% from August)	45 sqm
2-bedroom	$2,061 (-5% from August)	75 sqm
3-bedroom	$2,387 (-7.5% from August)	121 sqm

Pressure from COVID-19’s persistence is felt more by new developments in Phnom Penh. Popular developments like WorldBridge Sport Village have introduced a new set of discounts across its high-rise and landed property selection.

For the past half-decade, new developments in Phnom Penh have mostly attracted foreign buyers looking for property investment opportunities. But with the Kingdom’s de facto “closing off” to most tourists and international travelers, prospects of these properties to the international market dwindled through 2020 and most of 2021.

Rent price

Rent prices continue to experience pressure from the lack of tourists, the exodus of expatriates, and the overall tenant pool dying up the longer quarantine measures are in place.

As of September 2021, median rental prices by bedroom in Phnom Penh are:

1-bedroom apartment rent per month: 600 USD (No change from August)

2-bedroom apartment rent per month: 950 USD (5% change from August)

3-bedroom apartment rent per month: 1,800 USD (No change from August)

Since borders are still largely closed, the tenant market remains small, allowing renters some room for negotiation. Though this might change when Cambodia decides to reopen pending a decision from the Royal Government.

NOTE: Values displayed above are median prices. Newly listed affordable accommodations in prime areas can be found on Realestate.com.kh

Popular districts

Charmkarmon

Remains the most popular district to look for property in Phnom Penh in September 2021. It is a popular place for renters both local and foreigners looking for accommodations at reasonable prices. Popular subdistricts are Tonle Bassac and Toul Tompoung I.