






{"id":31801,"date":"2023-02-01T13:42:29","date_gmt":"2023-02-01T06:42:29","guid":{"rendered":"https:\/\/www.asiapropertyawards.com\/?p=31801"},"modified":"2023-03-09T12:17:55","modified_gmt":"2023-03-09T05:17:55","slug":"when-the-chips-are-down-in-cambodia","status":"publish","type":"post","link":"https:\/\/www.asiapropertyawards.com\/en\/when-the-chips-are-down-in-cambodia\/","title":{"rendered":"When the chips are down in Cambodia"},"content":{"rendered":"<p>The country\u2019s property sector has slowed dramatically following the boom years, but affordable housing initiatives and interest from local buyers offer chinks of light<\/p>\n<figure id=\"attachment_31802\" aria-describedby=\"caption-attachment-31802\" style=\"width: 1000px\" class=\"wp-caption alignnone\"><img decoding=\"async\" class=\"wp-image-31802 size-full\" src=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/shutterstock_1294346341.jpg\" alt=\"\" width=\"1000\" height=\"667\" srcset=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/shutterstock_1294346341.jpg 1000w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/shutterstock_1294346341-400x267.jpg 400w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/shutterstock_1294346341-600x400.jpg 600w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/shutterstock_1294346341-768x512.jpg 768w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><figcaption id=\"caption-attachment-31802\" class=\"wp-caption-text\">While land transactions and prices fall in major urban centres, both are growing in smaller urban areas and suburbs. khlungcenter\/Shutterstock<\/figcaption><\/figure>\n<p>When Sihanoukville\u2019s property sector collapsed after years of rampant growth, it wasn\u2019t just the seaside town that suffered. It set in motion a slowdown across the country that is still being felt.<\/p>\n<p>More than 1,000 buildings stand unfinished in the southwestern city. It marks three years since the government pulled the plug on a booming casino industry that led to billions of dollars in investment and turned a cheap backpacker spot into a frenetic gambling mecca.<\/p>\n<p>The government ban on all online gambling led to an exodus of expats and investors. Among those that have stayed, the jubilation of those early years has given way to bitterness as they find themselves ensnared in disputes and litigation.<\/p>\n<p>\u201cThere was a lot of greed,\u201d Zhang Jiawei, head of a Chinese business association in Sihanoukville, tells Nikkei Asia.<\/p>\n<p>&#8220;Businesspeople wanted to get money, even if they knew the prices of land or rent were too high. It was a bubble and people knew it would break, but you don\u2019t think anything bad will happen to you.<\/p>\n<p>\u201dThe unprecedented investment in Sihanoukville which reached its peak around 2017 was fuelled by online gambling.<\/p>\n<p>Operators would rent out space in physical casinos and beam the games from there to mainly gamblers in China.<\/p>\n<p>The industry sparked an entire economy around gambling, with Chinese restaurants, hotels and real estate multiplying. It became a popular place for Chinese to work and play away, and park their money outside China.<\/p>\n<figure id=\"attachment_32034\" aria-describedby=\"caption-attachment-32034\" style=\"width: 1000px\" class=\"wp-caption alignnone\"><img decoding=\"async\" class=\"wp-image-32034 size-full\" src=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/shutterstock_1665203.jpg\" alt=\"\" width=\"1000\" height=\"666\" srcset=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/shutterstock_1665203.jpg 1000w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/shutterstock_1665203-400x266.jpg 400w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/shutterstock_1665203-600x400.jpg 600w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/shutterstock_1665203-768x511.jpg 768w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><figcaption id=\"caption-attachment-32034\" class=\"wp-caption-text\">Sihanoukville\u2019s rapid development has been stalled as Cambodia has clamped down on the online gambling industry that was largely fuelling its growth. CamNet\/Shutterstock<\/figcaption><\/figure>\n<p>In 2019, Hun Sen banned online gambling, saying that the industry had been used by foreign criminals to extort money.<\/p>\n<p>Yov Khemara, director of the Sihanoukville Labour Department, said at the time more than 7,700 locals had been left unemployed after the ban.<\/p>\n<p>Analysts say the damage done to Sihanoukville\u2019s property market was the beginning of a decline across the country as the property bubble burst and the pandemic later hit.<\/p>\n<p>In Phnom Penh, it follows an oversupply in the condo market that started in 2015 and led to a steady downward trend in unit selling prices.<\/p>\n<p>In Siem Reap and Sihanoukville, land prices dropped on average by 11.2 percent and 7.2 percent respectively during the second half of 2020 compared to the same period in 2019 and have yet to go back to normal.<\/p>\n<p>Sam Soknoeun, president of the Global Real Estate Association, says transactions and rentals in the commercial building, office, condominium, apartment, and high-end housing segments \u201chave been devastated\u201d due their reliance on wealthy clients.<\/p>\n<p>\u201cWhen the Covid-linked economic crisis emerged in late 2019, further downward pressure was put on real estate markets across the globe, including Cambodia, with lockdown measures introduced by governments and flight cancellations reducing arrivals of international visitors and investors to near zero,\u201d he says.<\/p>\n<p>The problem has been compounded by the war in Ukraine and prolonged lockdowns in China to combat Covid-19.<\/p>\n<p>\u201cUnfortunately, the ongoing Russia-Ukraine war has led to soaring energy costs and inflationary pressure, threatening the country\u2019s economic recovery post Covid-19,\u201d said Knight Frank.<\/p>\n<p>\u201cThis crisis has impacted the global and regional economic recovery, including China which was a key source of FDI into Cambodia.<\/p>\n<p>Due to its stringent Covid-19 policy, China\u2019s economic recession has led to more frequent lockdowns and retrenchment in its real estate industry, which may harm Cambodia\u2019s economic recovery over the short term.\u201d<\/p>\n<p>The situation has forced many agents and developers to shift their thinking and look to previously overlooked markets, such as local buyers and projects in suburban areas.<\/p>\n<blockquote><p>The growing trend of young Cambodian professionals renting condominiums starting from USD300 per month indicates a level of support from the domestic market<\/p><\/blockquote>\n<p>While land transactions and prices fall in major urban centres, both are growing in smaller urban areas and suburbs, as transactions in the affordable market remain stable, say analysts.<\/p>\n<p>Knight Frank country manager Ross Wheble tells Property Report that the growing interest among local buyers in residential properties like condominiums was an \u201cencouraging sign\u201d.<\/p>\n<p>Equally, he says, is \u201ca growing trend of young Cambodian professionals renting condominiums with monthly rents starting from USD300 per month, indicating a level of support from the domestic market and propping up market prices and rental returns.<\/p>\n<p>\u201cThis, in part, can be attributed to developers offering better payment plans and incentives due to a softening in demand from foreign buyers, reducing the barrier to entry for Cambodian buyers and tenants.\u201d<\/p>\n<p>The market has been further buoyed by new government incentives for low-income buyers, who have long been precluded from entering the housing market, says Socheat Khemro, deputy director general at the Ministry of Land Management.<\/p>\n<figure id=\"attachment_32614\" aria-describedby=\"caption-attachment-32614\" style=\"width: 1000px\" class=\"wp-caption alignnone\"><img decoding=\"async\" class=\"size-full wp-image-32614\" src=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/2125385927.jpg\" alt=\"\" width=\"1000\" height=\"667\" srcset=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/2125385927.jpg 1000w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/2125385927-400x267.jpg 400w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/2125385927-600x400.jpg 600w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/2125385927-768x512.jpg 768w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><figcaption id=\"caption-attachment-32614\" class=\"wp-caption-text\">Up-and-coming areas just outside the centre of Phnom Penh like Chroy Changvar are proving attractive to Cambodia&#8217;s growing middle classes. JMTravelPhotography\/Shutterstock<\/figcaption><\/figure>\n<p>\u201cThe government wants to see more developers investing in affordable housing. The price of each affordable house should not be higher than USD30,000 so that low- and middle-income people can buy,\u201d he says.<\/p>\n<p>CBRE Cambodia managing director Lawrence Lennon says: \u201cThis implies that the units are going to need to be smaller, affordable or at the very least on the mid-end of the market. It is where the most likely demand is going to come from over the next few years.\u201d<\/p>\n<p>\u201cIt\u2019s true that the government wants to promote affordable housing but it will take some time to see the impact,\u201d says Neang Neang Sao, analyst at CBRE Cambodia. \u201cIt requires cooperation from both the government and the private sector.\u201d<\/p>\n<p>While analysts don\u2019t expect the local market to take the industry to the heights it reached before the demise of Sihanoukville, it comes at a much-needed time.<\/p>\n<figure id=\"attachment_32612\" aria-describedby=\"caption-attachment-32612\" style=\"width: 1000px\" class=\"wp-caption alignnone\"><img decoding=\"async\" class=\"size-full wp-image-32612\" src=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/1149951752.jpg\" alt=\"\" width=\"1000\" height=\"750\" srcset=\"https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/1149951752.jpg 1000w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/1149951752-400x300.jpg 400w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/1149951752-600x450.jpg 600w, https:\/\/www.asiapropertyawards.com\/wp-content\/uploads\/2023\/02\/1149951752-768x576.jpg 768w\" sizes=\"(max-width: 1000px) 100vw, 1000px\" \/><figcaption id=\"caption-attachment-32612\" class=\"wp-caption-text\">New domestic flights to areas around Cambodia should help the overall development of the country. Pierre06\/Shutterstock<\/figcaption><\/figure>\n<p>According to the World Bank, the \u201cstrong rates of growth seen prior to the pandemic will prove challenging\u201d for Cambodia.<\/p>\n<p>\u201cThe country remains vulnerable to downturns in external demand and disruptions in global supply chains,\u201d says Maryam Salim, World Bank country manager for Cambodia.<\/p>\n<p>As for Sihanoukville, there are still some banking on a comeback. Maritime City Co Ltd\u2019s has had its proposal approved to build a USD164.4-million hotel, with 582 rooms, in the province.<\/p>\n<p>It comes as the government commissions the Urban Planning and Design Institute of Shenzhen to complete an \u201cambitious\u201d masterplan to turn the city into a \u201ccommercial, services and logistics hub.\u201d<\/p>\n<p>Yet with the city still getting bad press over Chinese gangs operating in the area, having switched their focus from gambling to romance scams, it remains to be seen whether it can build a better image and lift up the industry as a whole like it once did.<\/p>\n<p><em>This article was originally published on <a href=\"https:\/\/www.asiarealestatesummit.com\/newsroom\/\" target=\"_blank\" rel=\"noopener\">asiarealestatesummit.com<\/a>. Write to our editors at\u00a0<a href=\"mailto:propertyreport@propertyguru.com\" target=\"_blank\" rel=\"nofollow noopener\">propertyreport@propertyguru.com<\/a>.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The country\u2019s property sector has slowed dramatically following the boom years, but affordable housing initiatives and interest from local buyers offer chinks of light<\/p>\n","protected":false},"author":9,"featured_media":31802,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"inline_featured_image":false,"footnotes":""},"categories":[97,92],"tags":[177,906,638],"class_list":["post-31801","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-magazine","category-news","tag-cambodia","tag-housing","tag-real-estate","news_country-cambodia","news_author-george-styllis"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.5 - 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