Buoyed by lower land prices in Phnom Penh’s suburban districts, more developers are moving out of the city’s central core to build affordable single-family housing, a trend that is expected to continue over the next year.
The capital’s northern and western districts of Pur Senchey, Sen Sok and Dangkao were the most popular areas for such housing—much of it in boreys, or planned residential clusters—and accounted for more than half of new housing construction this year, according to the latest Housing Market and Outlook Report 2016 by Vtrust Appraisal, a Phnom Penh real estate firm.
“The central [area] has no land to build new houses anymore, so they need to move to build outside, which makes the supply in suburban areas increase,” said Hoem Seiha, the firm’s research director.
Between 2002 and this year, the total number of new housing units built was 100,278, an average of just over 7,100 per year. But 14,000 units were built during the past year alone, the most recorded in a single year, and even more are expected next year, Vtrust reported. The report does not include statistics on apartments and condominiums.
The company was unable to provide precise price ranges for the new housing, but Mr. Seiha said the most popular units were two- to three-bedroom houses priced below $100,000.
CBRE Cambodia, the Phnom Penh affiliate of the U.S.-based real estate services company CBRE Group, reached a similar conclusion, finding that the Sen Sok and Pur Senchey districts had the largest shares of new single-family housing developments.
“This has been particularly prevalent in the north of Phnom Penh, where access to improving infrastructure has hastened development and increased demand,” said James Hodge, a surveyor for CBRE Cambodia.
Looking toward next year, both companies predicted slowing rates of presale properties sold before their completion, suggesting supply could start to exceed demand and result in better terms for buyers, such as smaller down payments.
But demand should stay robust as the city’s middle class grows and more people move to Phnom Penh, Mr. Hodge said. He predicted an increase in the construction of affordable housing next year, which he said would grow at a faster rate than mid-range and high-end projects.
Chou Nget, a senior consultant at Emerging Market Consulting, a regional consulting and investment advisory firm, said the peripheral areas would likely continue to be home to a mix of low- and middle-income residents.
“The prices are still affordable for the emerging middle class,” he said. “They are also homes for garment and other factories that could absorb large numbers of…blue collar workers.”
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