PHNOM PENH: The real estate sector in Cambodia has been on a downturn since the COVID-19 pandemic began in 2020. The war in Ukraine has further dampened demand, and many projects have been put on hold.
However, experts say that the slump is a natural cycle that will eventually ease. Ms. Kinkesa Kim, Deputy Managing Director of CBRE Cambodia, said that the demand and supply will rebalance, and the market will recover.
Ms. Kinkesa said that the real estate sector stalemate does not have a serious impact on the financial sector. She said that the amount of loans in real estate and construction is still manageable.
However, she said that there are two major factors that need to be addressed in order to support the recovery of the real estate sector. The first is to improve the logistics infrastructure for investors. The second is to curb overdeveloped real estate development activities that create unfair competition.
Mr. Mark Townsend, Chairman of CBRE Cambodia, agreed, saying that the absence of major foreign investments is one of the main reasons for the current situation. He said that the market will recover once foreign investors return.
Mr. Lawrence Lennon, Managing Director of CBRE Cambodia, said that the real estate sector needs to diversify to recover. He suggested repurposing existing properties and venturing into new sectors, such as agro-industry or manufacturing.
CBRE’s Mid-Year Review 2023 report found that 22% of the 298 ongoing real estate projects in Cambodia are on hold. Over 150 condominium projects have unsold inventory. The report said that the sector is “bleeding,” and that action is needed to prevent the situation from worsening.
CBRE Cambodia held a meeting with media partners to discuss the real estate market on the occasion of its 15th anniversary. The meeting was at the company’s headquarters in Phnom Penh last week. The discussion focused on the current state of the real estate market, the challenges it faces, and the outlook for the future.