Siem Reap: real estate buyers attracted by falling property prices
Siem Reap is certainly not as busy as it used to be, but it still attracts visitors, but in a very different style. Real estate agent Daka Kun Realty often sees them walk into his office in Siem Reap and advertise exactly what they are looking for: a cheap property.
Word of Angkor’s plight has spread widely in the Kingdom, attracting potential investors looking for properties well below market value.
According to Siem Reap real estate agency Daka Kun, buyers are often looking for properties for up to 40% below market value. It notes that areas such as Svay Dangkum, a large commune in Siem Reap, and Sala Kamreuk, a popular area among expatriates, are places often considered by buyers except for those looking for commercial properties in the city centre.
IPS Cambodia concurs, explaining that while property sales prices in Siem Reap remain largely stable, they have buyers willing to pay cash, both local and foreign, and are looking to buy in any part of Siem Reap where they can find distressed owners.
In terms of property type: villas, terraced houses and flats are the most common residential properties considered. IBS noted that the market for well-priced western-style houses and villas remains strong due to the high demand for home purchases and the low supply of these properties on the market.
While Siem Reap’s property sales market has managed to maintain interest, the same cannot be said for rental properties. “It has been difficult,” said one real estate agent. “I have tried many things: reducing overheads, offering package deals or cutting prices altogether. I consider it a victory if I break even for that month.”
Siem Reap has a population of over one million according to the latest 2019 General Population Census. Tourists who visit the town each year add another 2 million to that figure. But with Covid-19 continuing, tourist numbers have dropped by 77% since mid-2021, with only Cambodian tourists keeping them afloat.
The fall in tourism has forced many landlords to reduce their rental prices or suspend operations. “Rental prices have dropped by 30%, and even by almost 50%, compared to what they were before Covid arrived,” said IBS. The estate agency attributes the sharp drop in rental demand to the closure of international borders, adding that many tenants are leaving their rentals to find cheaper accommodation.
“Hotels, guesthouses and serviced rental flats have been hit hardest,” Daka Kun observed. She added that a considerable number of businesses operating in Siem Reap are foreign-owned and that the continued collapse of foot traffic has forced many expatriate owners in Siem Reap to look for more affordable places to live.
David Granger of IBS was optimistic about the 38th Road project. “Although the project includes the construction and upgrading of 38 roads, it provides much more than that.”
The project includes the improvement and rehabilitation of drainage and sewage systems, electricity infrastructure and the construction of pedestrian and cycle paths across Siem Reap. As of June 2021, the 38-road project is 63% complete and is expected to be finished on schedule by the end of 2021.
Granger is confident that the project will improve the quality of life in the town. “Residential and commercial areas within a two-kilometre radius of the city will benefit from significant infrastructure improvements. Those within a five-kilometre radius of the city will have improved access and the development of new residential areas will be stimulated. Property owners up to 10 km from the town will benefit from improved connectivity to the town centre and other parts of Siem Reap,” he said.
“The 38-road project is one of the factors that is generating interest in the town,” said Daka Kun. “People know that this will be a good thing for Siem Reap in the long run, so they are looking to buy properties near these roads today.”
Daka Kun notes that the outer parts of Siem Reap can see a considerable jump in prices, especially if the property is roadside. “There are land properties on the outskirts of town that are worth $20-30 per square metre and will see significant increases within two to three years of the road project’s completion,” she says, adding that downtown properties could also see an increase of around 20% in value, a more modest increase considering that downtown properties are already expensive.
The new Siem Reap International Airport is another project designed to enhance the town’s ability to accommodate tourists. The new airport is located 51km southeast of Siem Reap and construction began in March 2020. It occupies 700 hectares and includes the construction of new 4E runways, taxiways, terminals, operational support projects and external facilities, including highways – all to accommodate a projected 7 million tourist arrivals each year. The project was 42% complete in May 2021 and is expected to be finished during 2023.
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