Waning confidence in Cambodia’s political stability is discouraging overseas buyers from investing in the thousands of condominium units shooting up in the country, a leading realtor said on Wednesday.
Demand is slackening even as the condo supply has surged by more than 50 percent this year, Century 21 Mekong chief executive Chrek Soknim said at the release of the company’s market report for the first half of the year.
“Supply has increased dramatically—especially in January, February and March—with new projects being launched almost every day,” Mr. Soknim said.
But demand is lagging, particularly among foreign buyers, who make up 70 percent of the market, and the rising temperature of domestic politics appears to be making investors nervous, he said.
Those following the news in Cambodia would have read about the jailing of critics and opposition politicians, weekly protests to have them freed and the worldwide censure of what is widely perceived as Prime Minister Hun Sen’s meddling with the courts.
“Even though the political situation in Cambodia looks stable and nothing happens, the confidence and sentiment of buyers has decreased,” Mr. Soknim said. “They seem to feel reluctant to enter the condo market.”
Economic slowdowns in China and other major markets are also depressing demand, he said.
Prices are unlikely to fall, however, as they are still low compared to neighboring countries, but the market will need to reduce its dependence on overseas money, he said.
Founded in the U.S., Century 21 is among the biggest real estate companies in the world, with tens of thousands of agents across Asia.
The company’s report estimates demand for condominiums in the first half of the year at about 3,000 units, or 13 percent of total units built, down slightly from the same period in 2015. An estimated 13,730 units will come on the market this year, mostly in Phnom Penh’s Olympia City, the report said, adding to the 22,960 units built through 2015.