Apartment prices stay flat

[PHNOM PENH POST]

APARTMENT rental prices in Phnom Penh have remained stable so far this year, after dropping as much as 25 percent since the financial crisis hit, according to industry insiders.

Demand is on the upswing, but vacancy rates remain high as supply has rapidly expanded, with more apartment projects finishing and becoming available for rent, said Sung Bonna, President of the National Valuers Association of Cambodia.

“We estimate apartment rental prices are stable, after falling during the downturn that began in mid-2008,” he said.

“The supply of apartments for rent is going up and also the demand for rental has improved, compared to last year” he said.

Sung Bonna predicted prices would likely stay relatively stable this year, and finally increase next year.

NVAC figures released late last week show average apartment rents in central Phnom Penh for the highest grade properties, termed grade A, were between US$1,800 and $3,000 per month. Meanwhile, grade B properties fetched between $1,000 and $2,000 per month, and $500 to $1000 for grade C properties.

Prices had dropped by about 9 percent last year, after falling between 5 and 15 percent from mid-2008 to 2009.

Sung Bonna also said occupancy rates for the three grades of property hovered between 70 and 80 percent at present.

Cambodia Property Limited Property Manager Mang Sovandara said apartment rentals were improving in certain areas of the capital.

“Company research shows residential rent is better in locations such as Boeung Keng Kang 1, Tonle Bassac, and Chaktomouk [communes], if we compare to last year.”

The firm holds about 70 apartments and 500 villas for rent, he said.

Still, conditions are less than ideal, according to managers of newly opened properties.

Iung Chun Keng, general manager of Premier Office Centre in Sangkat Tumnub Terk, said demand at the project’s attached apartments has improved this year.

“We are still at the same price as last year – we cannot increase prices at the moment because there are a lot of apartments that were built in the capital.”

He claims to rent his apartments for between $900 and $1,200 a month, while charging $8.5 per square metre for office space.

Meanwhile, the Ministry of Land Management, Urban Planning and Construction approved some $324 million worth of construction projects in the first three months to the end of March, compared with projects worth $159 million during the same period 2010.

Earlier this month, industry insiders said the data indicated positive trends for the Kingdom’s construction sector as a whole, though some experts cautioned construction approvals were only a crude indication of overall property trends.