At the realestate.com.kh property expo over the last weekend, James Hodge, associate director of CBRE Cambodia, started his speech by saying, “Twelve months ago, I would have struggled to provide an answer to why Cambodians should consider buying condos, beyond investment.
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But now, the answer is clearer and the case for condo living is increasingly compelling.”
He says condominiums are “usually high-rise buildings formed by a number of individually-owned units, with the ultimate proof of ownership being a strata title”, whereas landed properties are “residential units such as semi-detached or fully detached houses, located directly on one’s own land”.
As to who its buyers are, Hodge points to young professionals looking for a modern, urban lifestyle, and young families often with moderate budgets and a need to live in the city centre where they are close to work. Apart from that, he says, buyers are investors who seek a suitable return on their capital.
Major reasons to own a condo are related to finance, he says, adding that condominiums typically offer higher rental yields (supported by continuous market demand for rental property) and are more affordable to buy.
“In a city where land prices are rising rapidly where CBRE estimates land prices increasing on average 18 percent across Phnom Penh in 2018 due to density, high-rise condominium developments are a more efficient use of land resource, allowing developers to deliver space at cheaper prices than landed properties that require much larger amount of land to deliver the same number of units,” Hodge says.
Regarding convenience, location and amenities where all the needs are within reach with less time wasted in traffic, condominiums are often located at city centres.
Data shows that in most of Phnom Penh’s districts, condominiums are offered at a cheaper price per square metre with higher rental returns than landed properties.
“The next reason would be good location and good amenities, as well as more efficient use of scarce land resources. You can enjoy urban lifestyles catering to your needs such as malls, supermarkets, restaurants and clinics that are within reach. These are more than just a place to live where you can have access to gym, swimming pool and a clubhouse,” he adds.
Hodge says buyers can get a condominium unit worth $150,000 in the city centre measuring 30 to 45 square metres or within the inner city, sized between 45 and 65 square metres. The minimum price of condo unit in Toul Kork is now just $38,000.
As per the findings in the first quarter of 2019, Hodge says 1,500 units were launched in the period. “There are more affordable condominium options with more competitive market and better price range. They are designed to appeal to a mass market of domestic buyers,” he adds.
Hodge also mentions that the biggest driver behind growing the numbers for locals buying condominiums would be Phnom Pehn’s problematic traffic where many hours are spent waiting in traffic to reach their destination.
In comparison, those who live in city centre condominiums have the pleasure of avoiding traffic snarls, and are able to enjoy stress-free lives.