The real estate market in Cambodia was robust at the beginning of 2020. According to data from the Ministry of Land Management, Urban Planning and Construction, a total of 728 projects with an estimated value of US$2 billion were approved for the first two months of 2020. This number indicates a growth of 47% compared to the same period in 2019. However, everything changed when the unexpected outbreak of the COVID-19 pandemic hit markets hard worldwide, including in Cambodia.
The latest World Economic Outlook by the IMF predicted global growth in 2020 to fall to 3%, which is the worst economic downturn since the Great Depression in the 1930s and even worse than the 2008 financial crisis. Given this impact, the World Bank and Asian Development Bank (ADB) have also downgraded Cambodia’s economic growth to only approximately 2.5% for 2020. This undoubtedly will strongly impact the real estate market across the kingdom.
Recently, the Global economic recession caused by the COVID-19 pandemic has been worse than that of the global financial crisis in 2008 and 2009. A similar finding by the Asian Development Bank ( ADB ) highlight that the COVID-19 pandemic could cost the global between USD 77 billion to USD 347 billion which translates into about 0.1 - 0.4 percent loss of global GDP. Unless there are proper measures to cushion the stock that COVID-19 outbreak has on the economy. It will affect every level of the society, Global Level Regional level and state level where no one can be excluded and escape the consequences it has on people’s life and their well-being as well as social equality. The effect of COVID-19 will be felt at every part of the world and simply by everyone. From the COVID-19 have pushed the country into a devastated situation. As the state ordered closures of non-essential businesses and imposed stay-home commands to the general public and although recently the Government of Cambodia lifted the restriction. Source: Cambodia Development Center (Vol 2 Issue 3, 04 April 2020).
According to the most recent Cambodian report by renowned international real estate agency CBRE, the real estate market in Phnom Penh has slowed down considerably since March 2020. Though the impact appears to be at an early stage in Q1, the situation is predicted to deteriorate from Q2 onward. Meanwhile, any rebound is expected by the end of 2020 or early 2021 with the hope that the virus will be fully contained. The Real Estate sectors are likely dropping from 30% - 50% of land price, housing price, and rental price.