In a recent report unveiled by the National Bank of Cambodia on January 29, 2023, the construction and real estate sectors in the country fa...
In a recent report unveiled by the National Bank of Cambodia on January 29, 2023, the construction and real estate sectors in the country faced a notable deceleration in growth. The construction sector experienced a modest expansion, recording a 1.1 percent growth rate in 2023, compared to the previous year's 0.5 percent. This slower pace was attributed to the development of critical public infrastructure, including bridges, airports, and expressways.
Despite the overall sluggish growth, the construction sector saw a boost in the importation of construction materials and equipment, marking a 4.7% increase from 2022. Approved construction projects also witnessed a one-time surge in both surface area and investment costs, particularly in the residential and public domains. Paradoxically, the total number of construction projects decreased by 20.5 percent, indicating a more focused but concentrated effort in the sector.
The real estate sector, too, witnessed a subdued growth rate of 0.5 percent in 2023, compared to 0.2 percent the previous year. Notably, home sales, encompassing apartments, and twin and single villas, declined sharply by 49.7 percent. In contrast, condo sales managed to eke out a 2 percent rise, revealing a shift in consumer preferences within the housing market.
The Residential Property Price Index (RPPI) faced a decline of 2.4 percent overall, with Phnom Penh experiencing a steeper drop of 3.2 percent, while provinces showed a contrasting uptick of 3.2 percent. These fluctuations indicate regional disparities and varying demand dynamics within Cambodia's real estate landscape.
Delving deeper into the economic landscape, the National Bank of Cambodia's 2023 Macroeconomic and Banking Progress Report and 2024 Outlook highlighted the pivotal role of public infrastructure investments in sustaining the construction sector's growth. Simultaneously, the report underscored a decline in foreign investments within the real estate sector, contributing to its overall slower pace.
As Cambodia navigates the delicate balance between infrastructure development and real estate dynamics, 2023's growth figures reveal a nuanced narrative. The construction sector's measured expansion, driven by public projects, contrasts with the real estate sector grappling with shifting consumer preferences. The coming year will likely witness a recalibration of strategies in both sectors to foster sustainable and balanced growth in Cambodia's property markets.
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