By January 2021, condominium supply totaled up to approximately 25,000 units, according to a Phnom Penh Post report. Experts foresee the upward sloping trend in the demands of condos in the next 5-10 years.
“Recently, condominium is getting more popular especially among Cambodian younger generations. Less than 30% of condo buyers were the local people a few years ago but now they account more than 80% comparing to the foreigners,” said Mr. Ear Chariya, CEO of AP Real Estate.
Traffic jams has become a big issue in Phnom Penh and people waste more and more time on the road from home to schools/work. Living in condominiums in the city center not only allows easy access to convenient stores, shopping, office and facilities like gym, pool and meeting places, but also saves time and reduces stress caused by fully packed traffics, said Mr. Ear Chariya. Condominiums demand is likely to increase in the next 5 to 10 years due to demand by young and middle age professionals who would find benefits of convenience and time saving from travel to work.
According to realestate.com.kh, condos in Phnom Penh are divided into 3 segments: affordable, midrange, and high-end. The price ranges from $1,200 to over $3,000 per square meter, depending on the type and location of the condo. Developers increased prices regularly from 5% to 30% per year.
Some looks into condo for investment rather than living. This is because buying condo is safer than other properties like land because it is easier for re-sale and renting, said Mr. Ear Chariya.
“Condo can be rented up to 8% or 12% of the purchased price per year. Some condos have offered the guaranteed rental return up to 10 years with the rental rate of 8% per year which means the buyers can get 80% of their investment in 10 years. In addition to the rental return, the appreciated value of some condo projects is up to 10% per year. Therefore, investors can get up to 18% per year of their return on investment in condos,” he added.
Many condominium development companies have been partnering with various banks and financial institutions to offer housing loan at competitive interests to aid buyers who cannot afford to pay all upfront.