Realestate.com.kh's Cambodia Real Estate Survey 2018 by Realestate.com.kh

REALESTATE.COM.KH RESEARCH

CAMBODIA REAL ESTATE SURVEY 2018

2018

TABLE OF CONTENTS 2

Introductions

Respondents profile

General property sentiment

Buyer behaviour

Finance

Real estate market information & Realestate.com.kh

Real estate industry feedback

Conclusion

About Realestate.com.kh & Acknowledgements Established in 2009, Realestate.com.kh has grown to be the foremost real estate portal in Cambodia, working with the nation's leading real estate agencies, developers and lenders. In 2015, Australia-based DCG partnered with founder Moek Chenda to develop the business rapidly. The platform, with content in Khmer, English and Chinese, showcases over 25,000 properties for sale and rent, and tens of thousands of property hunters visit the website and app each month. Realestate.com.kh also produces the biannual Cambodia Real Estate Magazine in English and Chinese and hosts a series of industry shows called Realestate.com.kh Expo. The event facilitated over US$30 million in direct sales last year alone. We would like to acknowledge the efforts of our team, real estate agents, developers and sponsors, without whom this survey would not be possible.

Realestate.com.kh Cambodia Real Estate Survey 2018 ÂŠ

INTRODUCTION

Realestate.com.kh, Cambodia's leading real estate website, is delighted to share the results of this year’s Cambodia Real Estate Survey. The survey provides useful insight into consumer sentiments about the Kingdom’s real estate industry, covers general market trends and demand, examines financial literacy in the country, as well as sources of property information and desired reforms.

“On behalf of our team, I would like to thank everyone who took the time to complete the 2018 survey. As the second survey of its kind, this year’s results are especially interesting. We hope the public and private sectors find the data of value in future planning.”

As the second iteration of this survey, various questions have been considered and the results have been studied alongside last year’s data. This gives us an opportunity to see trends in the market and examine changes in perceptions over the last year. The survey this year shows that consumers remain confident in the local property market. While we have witnessed multiple land and condominium projects target the “affordable” market over the last year, this portion of the market still holds potential for developers as demand continues to rise in the $50,000 price bracket.

Tom O’Sullivan CEO Realestate.com.kh

Realestate.com.kh Cambodia Real Estate Survey 2018 ©

INTRODUCTION

“Cambodia’s real estate market remains healthy and is continuing to grow this year. I believe that good cooperation between partners, the government, investors, and buyers, will help improve the market as a whole.”

Access to data, information and trends is the most important factor for any real estate market. Developers, investors and home buyers need trusted sources of information when they are deciding to purchase property or invest into the market. Aside from being a real estate website, Realestate.com.kh is also one of the largest sources in the country for collecting real estate data. The annual consumer sentiment survey has become an important reference point for developers, agents, investors, home buyers and other key stakeholders in the Cambodian real estate industry. Regarding the Kingdom’s real estate sector this year, we will continue to experience rapid growth in terms of housing and infrastructure development, increasing foreign investment, commercial centres, office space and malls. Growth will mostly be concentrated in Phnom Penh, although other areas with strong growth potential include Sihanoukville, Siem Reap, Battambang, Poipet, Kampot and Kampong Cham. Realestate.com.kh encourages those involved in the real estate sector to continue their investments. The results of this year’s survey show that demand for low- to middle-rate housing projects will be a huge market, while more luxury spaces will present greater investment opportunities. Realestate.com.kh would like to thank everyone who took time to fill out our survey. Hopefully, these details will contribute to addressing the challenges and opportunities within Cambodia’s real estate market.

Ky Kosal Editor Realestate.com.kh

Realestate.com.kh Cambodia Real Estate Survey 2018 ©

RESPONDENTS PROFILE

2.1 Demographics The 2018 Cambodia Real Estate survey, powered by Realestate.com.kh, attracted over 2,000 respondents. The survey was focused primarily on Cambodia’s largest database of property buyers, renters, sellers and landlords, including both Cambodians and foreign nationals. This resulted in a respondent profile targeted toward active property seekers, as evidenced by the demographic information collected.

Similar to last year’s survey, the majority of respondents were Cambodian (72 percent this year vs 68 percent last year). Chinese nationals are well represented at 5.63 percent, followed by US, Australian, French and Singaporean nationals. The results showed that 81 percent of respondents live in Cambodia. The majority of respondents surveyed were between 21 and 50 years old, accounting for 83.46 percent, 0.54 percent were 20 years or younger while 16 percent were 51 years or older.

Realestate.com.kh Cambodia Real Estate Survey 2018 ©

RESPONDENTS PROFILE 2.2 Purchasing Power The average monthly income of respondents was higher than last year which is a reflection of the emerging middle class in Cambodia. Ultimately, this means purchasing power and affordability is increasing.

AVERAGE MONTHLY INCOME 2018

2017

Those with incomes of less than $500 a month accounted for just 16 percent of respondents down from 28 percent last year. People making between $501 and $1,000 increased to 25 percent from 22 percent last year. At the top of the chart, 7.88 percent of respondents reported monthly income of $10,000 or more.

RESPONDENTS PROFILE Respondents from the real estate and construction sector accounted for 21.63 percent, followed by banking and finance workers at 13.59 percent and retail employees making up 7.83 percent.

Those in the restaurant, hotel or hospitality industry represented 5.65 percent of those surveyed and 4.46 percent were students. People who work for NGOs, the government or are self-employed made up 46.85 percent.

PROFESSION

14%

Realestate.com.kh Cambodia Real Estate Survey 2018 ÂŠ

47%

RESPONDENTS PROFILE 2.3 Housing The majority of respondents claimed to live with their partners or spouses. Just over 20 percent reported they were living with family members and 20 percent said they live on their own.

Results varied slightly from last year, when 43 percent lived with a spouse and 28 percent said they resided with family members.

HOUSEHOLD STRUCTURE

Who do you live with?

Realestate.com.kh Cambodia Real Estate Survey 2018 ÂŠ

GENERAL PROPERTY SENTIMENT

3.1 Affordability Similar to last year, house hunters generally perceived property to be affordable as 59 percent of respondents marked very affordable, affordable or moderately affordable on the survey.

Those three categories totalled 60 percent in last year’s poll. In a marked difference from last year, however, only 10 percent of survey takers said property was very affordable, down from 15 percent last year.

PERCEIVED AFFORDABILITY OF PROPERTIES

●

Very Affordable

●

Moderately Affordable

15% 10%

15%

2018 ●

Affordable

●

Moderately Unaffordable

17%

35%

2017 34% 34%

●

Very Unaffordable

28%

Realestate.com.kh Cambodia Real Estate Survey 2018 ©

GENERAL PROPERTY SENTIMENT 3.2 Property Possession In terms of property possession, 48 percent of respondents own their property in full, while 20 percent own property through a bank loan. The amount of people who own property through a bank loan saw huge growth. Over the last year we have seen lenders reducing interest rates and opening borrowing opportunities to more people. Thirty-one percent of respondents were renting at the time of the survey, and 61 percent of those renting were hopeful of one day owning their own home.

30%

45%

19%

12%

48%

2018 20% 12%

2017

12%

PROPERTY OWNERS/RENTERS

WHEN ASKED WHETHER IT IS A BETTER TIME TO BUY OR SELL A PROPERTY ●

Full Owners

●

Buy a Property

●

Own with loan

●

Sell a Property

●

Renters

●

Renters but would like to own a house

25%

3.4 Buying and Selling

24%

2018 2017

75%

76%

Buyers have expressed continued confidence in the market, similarly to last year. Three quarters of survey takers said it was a better time to buy property than sell it. That figure is down just one percent from last year. 7%

Realestate.com.kh Cambodia Real Estate Survey 2018 ©

GENERAL PROPERTY SENTIMENT 3.5 Client Market Prospective The three main areas of Phnom Penh, Sihanoukville, and Siem Reap are experiencing notable growth in both value and popularity with developers and buyers.

According to this year’s survey results, nearly 80 percent felt that they have seen a general increase in property prices over the past year, compared to just 59 percent who thought the same thing last year. The vast majority expected prices to increase over the next year.

DURING THE PAST 12 MONTHS, PROPERTY PRICES HAVE BEEN PERCEIVED TO:

OVER THE NEXT 12 MONTHS, PROPERTY PRICES HAVE BEEN PERCEIVED TO:

●

Increased

●

Increased

●

Decreased

●

Decreased

●

Stayed the same

●

Stayed the same

23% 13%

16%

29%

2018 79%

2018 78%

2017 22%

12%

55% 59%

Realestate.com.kh Cambodia Real Estate Survey 2018 ©

2017

BUYER BEHAVIOUR

4.1 Demand Nearly 75 percent of respondents believe that now is a good time to purchase property and intend to purchase within the next year, which is a slight increase over last year when 73 percent were intending to buy.

When asked: “Are you more likely to purchase a property to live in or invest in?” Figures showed that 62 percent were buying as an investment, whereas 38 percent planned to live on the property. This shows a huge switch over last year when 54 percent planned to live in a new property and 46 percent used it as an investment.

WHEN ASKED IF THEY ARE INTENDING TO BUY PROPERTY IN THE NEXT 12 MONTHS

●

Yes

●

27% 26%

2018 2017 74%

73%

Realestate.com.kh Cambodia Real Estate Survey 2018 ©

BUYER BEHAVIOUR 4.2 Property Types, Affordability and Location

35% 22%

Manufacturing, tourism, agriculture and construction are the four key drivers of economic growth in the Kingdom. The number of developers and multinational companies in the country is expanding, so it’s no surprise that land is the preferred above other types of property. Demand for land has nearly doubled from last year according to our survey. Other categories of property were down slightly this year. Eighteen percent prefered a condominium, down from 22 percent last year. The demand for shophouses was down by nearly 10 percent, while villa demand was down by six percent.

23%

11%

2018

2017 20% 34%

2018

21% 25%

26%

17%

WHEN ASKED WHETHER THEY WERE PLANNING TO BUY... ●

An independent house

●

A land in a plot land project

●

A property in a borey

●

A condo in a new development

2017 17%

40%

11%

22%

When asked whether they would buy an established or newly-built property, 66 percent of people said they would prefer to purchase a new property in a borey, condo or plot land project. Thirty-four percent prefered to buy an independent house and a quarter of respondents expressed the desire to opt for land on a plot land project, wanting to build their own home.

●

Factory/ Warehouse/ Business

Nineteen percent are thinking about buying a condo or apartment in a new development and 21 percent are looking to buy a home in a borey. This data is a good sign for both existing developers and those who are considering launching a new project.

16% 18% 25%

PREFERRED PROPERTY TYPE

●

Land

●

Condo/Apartment

●

Shophouse

●

Office

●

Villa

●

Others

Realestate.com.kh Cambodia Real Estate Survey 2018 ©

BUYER BEHAVIOUR With regards to budgeting for a home, this year’s survey showed that nearly half of the respondents expect to pay less than $50,000 which is slightly higher than the same demographic last year. Just over 20 percent expect to pay between $50,001 and $75,000, 13 percent see themselves paying $75,001 to $100,000 and 14 percent expect to pay between $100,001 and $200,000.

Three percent expect to pay over $300,000 for their property purchase. In general, this year’s survey results are in line with last year’s, indicating there is still a large pool of middle-class Cambodian buyers looking to purchase property for less than $75,000.

HOW MUCH ARE YOU LIKELY TO SPEND IF YOU WERE TO PURCHASE A PROPERTY?

2018

2017

Realestate.com.kh Cambodia Real Estate Survey 2018 ©

BUYER BEHAVIOUR The capital is still the location where most respondents are looking to buy property. Nearly 75 percent indicated they wanted to buy in Phnom Penh. The boomtown of Sihanoukville saw a slight increase in demand with nine percent showing interest in buying property there, while interest in Siem Reap was down slightly to just over five percent.

PHNOM PENH SIHANOUKVILLE SIEM REAP OTHER

Interestingly, desire to buy in secondary markets such as Kampot, Kep and Battambang rose this year to 11 percent. Diving deeper into the data on Phnom Penh, it can be seen that Sen Sok is the most high-demand district. Fourteen percent of those looking for property in the capital wanted to buy in that area. This is a growth of four percent over last year. The only other district to see demand grow by that much was Por Sen Chey where just over nine percent of capital shoppers were looking to buy.

The only other district to see demand grow by that much was Por Sen Chey where just over nine percent of capital shoppers were looking to buy. The biggest decline was seen in 7 Makara, whose numbers were down 10 percent from last year’s poll. Similarly, Meanchey district was down nearly five percent.

SEN SOK CHROY CHANGVAR POR SEN CHEY CHBAR AMPOV CHAMKARMON TOUL KORK DANGKAO DAUN PENH RUSSEY KEO PREK PNOV MEANCHEY 7 MAKARA OTHER LOCATIONS

BUYER BEHAVIOUR 4.3 Buying Motives People in the Kingdom generally think property is a good investment. Over 80 percent of those surveyed indicated as such, compared to 77 percent who expressed the same positive sentiments last year.

Following location, high profit potential was the second most popular factor with 14 percent, followed closely by price and infrastructure. The importance of a low interest rate was down from last year as only two percent of respondents claimed this was the most important factor for them.

Despite all the factors that go into the decision to buy, location remains the top motivator for the countryâ&#x20AC;&#x2122;s property seekers. Fifty-eight percent said it was the most important factor, up from 50 percent last year.

FACTORS PEOPLE CONSIDER WHEN BUYING A HOME (in order of most importance to least) 2018

1 2 3

Location Location

High Profit High Profit

2017

Infrastructure

Low interest rate

Price Price

Realestate.com.kh Cambodia Real Estate Survey 2018 ÂŠ

FINANCE

The Royal Government of Cambodia, together with finance institutions, banks, and developers are continually striving to open up mortgage access to more people. At the time of this report, 32 major lending institutions were registered with the Ministry of Commerce. While an increasing number of banks are lending to developers, many are also offering finance options to buyers. Of all respondents looking to purchase property, 75 percent indicated they would need a loan to do so. This figure is up from 70 percent last year.

Of those needing a home loan, 39 percent expected to make a down payment of 30 percent or more. This number is up slightly from last year’s 37 percent. Notably, 25 percent of respondents didn’t expect to put down a deposit, as compared to 30 percent who were in the same category during the last poll. While the amount of people expecting to put down a 30 percent deposit was down by three percent, the portion expecting a 50 percent down payment was up by the same margin.

PEOPLE’S EXPECTATION IN CONTRIBUTING A DEPOSIT

12% 4% 15%

25%

30%

23%

●

People expecting 0% deposit

●

People expecting 10% deposit

●

People expecting 30% deposit

●

People expecting 50% deposit

●

People expecting 70%+ deposit

20% 36%

2018 2017

33%

REAL ESTATE MARKET INFORMATION & REALESTATE.COM.KH

Real Estate Search

Realestate.com.kh

Access to timely and reliable market information is essential in any major life decision. Choices about housing and investment are no exception.

Realestate.com.kh traffic has increased by 300 percent since the last survey so it is no surprise that 90 percent of respondents had acknowledged using the website at some point during their property search compared to 55 percent last year.

Respondents were asked to select all the different sources of information they relied on for property information. The majority of them, 72 percent, got information online. This number is up from where it stood last year at 66 percent.

Of those that were surveyed, nearly 94 percent said the site was useful, six percent claimed it was slightly useful and just over one percent believed it was not useful.

While 15 percent of property hunters choose to go directly to real estate agents, nearly eight percent got information from newspapers, magazines or other print media.

PREFERRED SOURCE OF INFORMATION ON THE PROPERTY MARKET

2018

2017

Realestate.com.kh Cambodia Real Estate Survey 2018 ÂŠ

REAL ESTATE INDUSTRY FEEDBACK

Just like last year, participants were asked to rank the most important factors they considered while looking for a real estate agent. Interestingly, the old adage that “price isn’t everything” seems to hold true. Honesty and professionalism grabbed the top spot, as nearly 30 percent of poll takers said this was the most important factor. Thirteen percent said fees were the most important factor, followed by reputation with 12 percent and knowledge with almost 11 percent. Availability rounded out the list with three percent saying this was most important to them.

This data shows that real estate agents should continue to invest in their staff, training and education to stand out from the pack. As a testament to the industry’s growing professionalism, Realestate.com.kh has worked with the Ministry of Economy and Finance (MEF) and the Cambodian Valuers and Estate Agents Association (CVEA) to establish the Cambodia Real Estate Awards. This event serves to celebrate the nation’s finest real estate professionals.

PREFERRED CHANGES MOST PEOPLE WOULD LIKE TO SEE INTRODUCED IN THE CAMBODIA REAL ESTATE INDUSTRY

2018

2017

REAL ESTATE INDUSTRY FEEDBACK When asked about the changes they would like to see within the Kingdom’s real estate industry, 48 percent of respondents wished to see standardised valuation pricing. This was also at the top of the list last year.

Under Cambodian law, agents must have the proper licence. The MEF, CVEA and Realestate.com.kh are all going to great lengths to ensure agents are getting the right accreditation.

Compulsory real estate agent certification was the second most desired change with 38 percent of poll takers putting this at the top. That was followed by wanting agent commissions to be regulated.

Additionally, both the MEF and CVEA have this year established industry-leading courses to provide education to the sector’s professionals.

FACTORS PEOPLE CONSIDER WHEN CHOOSING A REAL ESTATE AGENT (in order of most importance to least) 2018

Professionalism Honesty

2017

Knowledge

Availability

Reputation

Honesty

Commission fee and price of service

Knowledge

Professionalism

Reputation

Availability

Commission fee and price of service

CONCLUSION

This year’s Cambodia Real Estate Survey shows that the Kingdom’s property market remains attractive to home buyers and property investors. There was a marked decrease in the number of people whose income is less than $500 a month, and an increase in those who are making between $501 and $10,000 a month. This is a clear sign that the middle class is emerging in the country. The majority of respondents believed that prices have increased in the last year. What’s more, most expect the growth to continue over the next year. A staggering 74 percent plan to buy in the next 12 months. Land remains the most coveted form of property, and Phnom Penh is where most want to buy it. The most desired district of Phnom Penh is Sen Sok district, home to the newly-opened Aeon Mall 2. It’s no surprise, then, that the floodgates have opened for the surrounding area.

Affordable housing (under $50,000) holds the most demand, similar to last year. Middle and high-end properties seem to be focusing on capturing affluent Cambodian customers and international investors. The majority of people require a home loan for their property purchase, however 35 percent are able to make a 10 percent deposit. A quarter of respondents don’t have access to a home loan. This means developers should strive to create payment plans for first-time home buyers. The majority of people believe real estate is a good investment, and most said location was the most important factor for them. Accessing resources online is the most popular way for people to find real estate information. Internet penetration in the country is ramping up, so this is no surprise.

CONCLUSION Overall, Cambodiaâ&#x20AC;&#x2122;s real estate market remains healthy and the public is bullish about its prospects for the future. Regulators should continue to focus on supply side factors, in particular land titles, planning approvals and infrastructure. The private sector is encouraged to invest in the market with confidence, as the demand for housing at realistic price points is stronger than ever. Both the government and private sector have done an excellent job educating people about finance, spending and property in general, which is to be commended.

Realestate.com.kh is proud to present the Cambodia Real Estate Survey 2018. With this information, we hope to aid those in government, developers, agents and financial service providers in continuing to advance the industry and bring value to the market. We would like to thank everyone who took the time to complete the survey. For media or other enquiries, please email: info@realestate.com.kh

For media and other enquiries, please email: info@realestate.com.kh +855(0)17436756