You only need to glance at Phnom Penh’s ever-changing skyline to see why one of the hottest topics of conversation in Cambodia is the condominium market. New construction sites are appearing each week, adding to doubt within the property market. Can property demand keep up with development? While many experts point to a greater reliance on foreign investment to battle low occupancy, Ms. Jenny Chea, Deputy CEO of the CMED Group, says there are many factors that will increase demand.

“Most people in the country don’t know whether this rapid growth in the property sector is sustainable,” Ms. Chea explains. “It’s not a normal market. It’s not a market where you have the information to calculate how much construction is needed. People will say the supply is too much but it’s not something you can pinpoint.”
Due to laws limiting foreign ownership, condominiums are one of the few methods for overseas investors to buy into the rapidly evolving Cambodian property market. Foreigners can own property if the apartments or office spaces are above the first floor, and recently constructed. While this is justifiably aimed to limit ownership of land, it also recognises the ownership of apartments, and this has provided an impetus for investment. But will this investment translate to greater occupancy?

“There will be many foreigners and expats that come in,” Ms. Chea says. “You can say now that even after the buildings are completed there are not many lights on at night. Apartments are sold with a one- or two-year guarantee of rental returns. But what happens after or year two years? That is the question.”

For now, property developers and companies like CMED Construction are primarily focused on sales. That must always be the first concern for a rapidly growing property market. If it’s the first measure of success, Ms. Chea believes low price points, along with rapidly increasing construction quality, is guaranteeing results for savvy developers.

“One of my projects in BKK1 has a Japanese developer, and 90% of apartments are sold,” she says. “70 to 80% of the units have been sold to Japanese buyers. So yes, I think compared to the property prices in Thailand or Singapore, Cambodia is very cheap. It’s a good opportunity to own a home.”

One factor many foreign experts ignore is the likelihood that social change will affect the buying habits of Cambodians. As a Cambodian-owned business with its sites aimed at the growing property market, CMED sees the country’s growth as a key factor in the future of the property market.

“The younger generation is beginning to grow,” Ms. Chea explains. “Cambodia is a very family orientated country. Many young people stay with their parents. In that way, it’s very different to other countries. But I think for the younger generation now, privacy is becoming more and more important to them. So eventually they will move out. That’s where numbers may increase. Until then we generally calculate one family to be five people. But as time goes on and we see a trend of people seeking privacy, the market will change.”