Foreign renters are vacating apartments in Phnom Penh’s central Daun Penh district and opting for cheaper, more spacious and better-equipped living spaces elsewhere in the city, realtors and landlords say.
As a result, landlords in Daun Penh are being forced to decrease rental prices to try and attract new tenants.
“It is a great location. Expats still want to live there, but they realize they can get a better place for their money elsewhere. One year ago, this wasn’t the case, but that’s changed,” said Chea Channara, a realtor at Palm Real Estate, which is based in Chamkar Mon district.
Across Daun Penh last week, at least 40 apartments had “For Rent” signs on streets 13, 19, 178 and Sisowath Quay.
Many apartments in Daun Penh—save for the riverside—are starting to show signs of their age after years of use and little renovation. Many of them are also smaller and offer fewer amenities than areas further from the center such as Russian Market in Chamkar Mon district.
“The old apartments and old styles are low on the market now. The demand was OK a year ago, but now there’s a new supply of apartments that match the quality and atmosphere that Westerners and foreigners want, and they always move to the better apartments,” said Sung Bonna, president of Bonna Realty Group.
Mr. Bonna pointed to more modern apartments in Chamkar Mon district that offer amenities such as swimming pools, gyms and laundry services as the reason for expatriates opting for areas other than Daun Penh.
“If landlords don’t have such facilities and they don’t have the ability to upgrade…they will have to step down the price,” he added.
Several landlords over the past two weeks admitted to dropping prices in an effort to rent out apartments quickly after they had remained vacant for months.
“I had to drop from $350 to $300, and then I was asked to drop to $250 per month, but I could not agree,” said Nguon Davary, 64, who has had a “For Rent” sign outside her studio apartment on Street 178 for two months. She finally rented the space on Tuesday at $300.
“No one is renting. Before, it only took one week to rent this place,” she added.
Mr. Channara, the realtor, said landlords in Daun Penh attempt to hold out for as long as they can before dropping prices because they think they can find someone who will pay their asking price due to the apartment’s prime location.
“It all depends on if they need the money, and how long the apartment becomes vacant. One month might be OK, but after two or three months, it becomes a problem,” he said.