The Impact Of Covid-19 On Cambodia’s Real Estate Industry
The real estate industry in Cambodia has been significantly impacted by the Covid-19 pandemic, resulting in a decline in sales and rentals. The country’s heavy reliance on foreign investors and visitors has also been a contributing factor to the challenges faced by the industry. However, local real estate agencies have quickly adapted by focusing on the local market, providing rent relief to small businesses, and adopting digitalisation to continue operating. Despite these challenges, the real estate market in Cambodia is gradually recovering, presenting opportunities for investors and homebuyers alike.
If you’re interested in exploring the real estate market in Cambodia, contact IPS Cambodia, a leading real estate agent in the city. – rephrase this in an informational tone
How Did The Pandemic Affect Cambodia’s Real Estate Industry
Decreased The Demand For Real Estate
The pandemic was a hard time for everyone, both emotionally and financially. The economy of the world was at stake. Real estate was one of the sectors whose demand decreased during the pandemic. Many businesses were shutting down, vacating the office spaces. Foreign investments were stopped due to the lockdown. No one knew when everything would be okay, and they hesitated to invest anywhere.
A Slowdown In Construction Projects
The ongoing construction projects were slowed down due to many factors, such as labour shortages, supply disruption, and financial shortages. The pandemic disturbed the supply of materials as there were restrictions on the borders and within the city. Everyone was scared and didn’t want to leave home, leading to a labour shortage. There were also financial issues as the companies were not making as much money due to the less demand and delayed client payments.
Government Measure to Look After the Crisis
The Cambodian government jointly issued an official proclamation to ease some of the financial strain felt by those who have existing commitments to pay off property purchases in Cambodia in light of the financial hardship experienced by many as a result of COVID-19. The following factors should be taken into account, according to requests and recommendations made by the government to all real estate development businesses, particularly those developing co-owned and Boreys buildings:
- Based on the clients’ actual ability to pay, decreasing the instalment payment terms;
- Waiver of late payment penalties for co-owned facilities and Boreys purchasers;
- No interest or additional fines should be applied to late instalment payments;
- Implement policies for customers on the length of instalment payments for Boreys properties and co-owned buildings.
How The Pandemic Modified The Business Models Of Economic Sectors In Cambodia?
Targeting Local Market
To mitigate the impact of the pandemic, Cambodian real estate companies are shifting focus to the local market and targeting non-Chinese Asian investors. The country’s first online real estate sale attracted spectators worldwide, with 50% being Cambodians. This shift aims to establish a more independent national economy.
Shifting to Online Channels
The Cambodian government had to quickly adopt digitalisation for economic recovery during Covid-19, as the country’s eCommerce market was underdeveloped. The head of Juwai IQI Cambodia recommended online transactions for business continuity, especially in real estate. Technology was crucial for successful online property sales and for attracting foreign investors.
Offering Relevant Products and Services
Real estate sales dropped due to the pandemic, causing concern among agencies. However, rental and property management remained profitable. Online property sales saw mid-tier condominiums, boreys, and serviced flats as the most in-demand properties. With businesses closing, residential properties are ideal for sale or rent, while e-commerce creates opportunities for industrial and warehousing properties.
Real estate companies are expected to be more empathetic after the pandemic, with rent relief for small businesses and virtual tours for clients. To maintain customer loyalty, they prioritise cleaning and disinfecting their buildings to ensure a sense of safety among clients.
Other Economic Activities
The rise in other economic activities left people with the funds to invest in real estate. There were already some approved projects to build after the pandemic, including the 2,000 dwelling developments that will drive the real estate market after the pandemic. The 36 borey projects will result in the development of about 6,500 houses.
According to Asian Development Bank, the Cambodian economy accelerated by 5.3% in 2022, and it is expected to grow by 6.5% in 2023. Cambodia’s real estate sector has not only driven up with the help of foreign investors but also with the help of local middle-class investors. During the pandemic, many middle-class people invested in real estate, resulting in the stability and rise of the sector.
If you are looking to invest in real estate in Cambodia, you could contact IPS Cambodia for the best option and prices. They are the most reliable and top-tier real estate development firm in Cambodia.