Property sales in expos over 18 months will surpass $50 million, says realestate.com.kh chief executive officer Tom O’Sullivan who believes that developers in Cambodia have wisened up, having learnt what the market demands.
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“They seem to understand both the buyers, and market (demand) hence, the focus on certain factors such as payment terms and price ranges that Cambodian buyers fall within,” he tells the media recently.
The fourth Home and Lifestyle Expo held in Koh Pich last weekend saw condominium and affordable home units in Phnom Penh city centre and suburbs snapped up by both locals and foreigners.
O’Sullivan estimates that the sale of units over the weekend fair would exceed $30 million from the fourth expo.
Condominium sales by developer Urban Village was valued at $3.5 million while affordable housing units by WorldBridge totalled $250,000.
Developer Arata, managed to sell 12 of its Garden Residence property units with an average price of just under $100,000 and Top International Agent sold units up to $60,000.
He notes that the shift in the trend among international developers was building condos and up till recently, focussed on international buyers.
“However, project developers such as Urban Village have been building condos catered to the Cambodian market. The quality and interior are reasonably priced for locals,” he observes.
realestate.com.kh, one of Cambodia’s largest real estate portals, organised its fourth property convention in two years which featured over 100 exhibits and sponsors including developers and estate agents. It also conducted two day-long seminars on various housing topics which was attended by property hunters and interested parties.
O’Sullivan says developers are now working closely with banks to obtain finance to make sure the market is more affordable for first time house buyers.
He also points out a slight move towards construction in the hospitality segment, especially hotels by foreign developers.
“While there are more international developers launching, they are also asking what the Cambodian market needs, hence the turn towards hotels, for example,” he adds.
Defining affordable housing
Cambodia has seen a gradual rise in affordable housing projects over the last couple of years.
Arakawa housing project and WorldBridge Land are some of the prominent projects that have come up.
However, the lack of laws surrounding affordable housing projects blurs the definition of affordable units. O’Sullivan feels that there is a need for a set definition for affordable housing in the country.
“Developers have been launching projects and calling it affordable housing project but I too have my own understanding of what affordable housing is,” he states.
For instance, he cites, WorldBridge affordable homes are around $35,000 while the Arakawa project is considerably lower.
“But not everyone has access to buying a property under a project such as Arakawa. Since the Arakawa project is working closely with the government, potential buyers will have to go through a filter in order to qualify,” he tells Capital Cambodia.
Raising foreign investment
He strongly believes that foreign investment is something everyone has to be aware of. Markets such as Thailand are similar to Cambodia and they are also welcoming investments from other countries such as Singapore, China and South Korea.
On the Belt and Road Initiative (BRI), O’Sullivan says the project has been attracting investors and developers alike into the market along with the project.
The BRI has had direct initiatives with the real estate market in Cambodia and it provides extreme confidence and acts as a huge driver for investments in the country.
“Cambodia has a lot to thank China for including stimulating the economy. As it stands, we really need foreign investment from China, Japan and South Korea to build homes and hotels here,” he adds.
Touching on tourism, O’Sullivan draws a correlation between the rise in tourism and real estate projects.
He says that there definitely is stock for international investors to buy as in the case of Siem Reap where developers are building hotels.
Investors can invest in that part of the market and lease the property out to visitors to see a return on investment.
“There is enough supply for now but I don’t think the international investors are slowing down,” he adds.