PHNOM PENH: From 2023 to 2026, condo developers shifted their focus away from high-end and mid-range condos toward affordable condos in the market. As a result, the number of affordable condo units has grown significantly over the past three years.
According to research by APS, more than 14,100 affordable condo units entered the market during the last three years, compared to around 4,400 mid-range units and only about 1,500 high-end units. Looking back at the previous three-year period (2020 to 2022), there were only 8,500 affordable units, 8,600 mid-range units, and 1,600 high-end units added to the market.
The study shows that as the supply of affordable condos grew rapidly, prices for this category dropped noticeably. Prices for mid-range and high-end condos dropped as well. Specifically, affordable condos dropped to an average of $1,200 per square meter, down from $1,400 in the previous period. Mid-range condos fell to around $2,100 per square meter, down from $2,200. High-end condos decreased to an average of $2,700 per square meter, down from $2,800.
Ms. Sok Hengpichmony, Retail Services Manager at APS, explained that having more supply than demand drives prices down. This price decline affects not only condos but also shopping malls. In recent years, several shopping malls have closed due to tough competition. Newer malls opening with fresh strategies have caused older malls to close down after losing customers.
She added that when demand is lower than supply, many properties remain vacant. Therefore, as a real estate advisor, she encourages property owners to find creative ways to generate income from vacant units, such as converting them into offices for rent or offering apartments at below-market rates.
Mr. Po Eavkong, CEO of Advance Real Estate, noted that a few years ago, many Chinese investors came to Cambodia with large development projects, each featuring multiple buildings. However, investors from other countries, such as South Korea, have decreased. Because local Cambodian demand for condos remains relatively low, overall market demand has fallen short of supply.
It is worth noting that high-end and mid-range condos still appeal to foreign buyers. Because of this, financially strong developers continue to build condo projects aimed at buyers from Japan, China, South Korea, Southeast Asia, and Europe.