vtrust journal of real estate - housing market & outlook...

1

VTRUST Journal of Real Estate 23 November, 2016 Volume 2, Issue 1

Special Issue

Landed Housing Market and Outlook Report 2016 for the District of Ruessei Kaev

Ruessei Kaev’s landed housing market grew remarkably within the preceding five-year period from

2012 to 2016, with an average of 1,600 new housing units launched into the market each year. Well

over 2,800 units were completed in 2016, and it is projected that well over 3,000 additional units will

be finished off and ready for prospective occupants by 2017.

Fortunately, only 14 percent of the launched units are awaiting total completion recorded as of today,

whereas 17 percent are still listed on the market inventory. In sum, albeit a slight market slowdown

since the end of 2015, housing market stimuli initiated by developers has come to ignite the demand

engine again, giving rise to a ‘slightly’ positive trend expected to continue over the course of 2017.

Report Summary

Author

Hoem Seiha

Director of Research, VTrust Appraisal Co., Ltd.

2 VTRUST Journal of Real Estate | Volume 2, Issue 1 | Ruessei Kaev Housing Market and Outlook Report 2016 |

Ruessei Kaev District

Ruessei Kaev district (Khan Ruessei Kaev or Khmer: ខណ្ឌ

ឬស្សីកែវ) is one of Phnom Penh’s 12 districts and adminis-

tratively subdivided into 6 communes (Sangkat or ស្ង្កា ត់),

namely Chrang Chamreh Ti Muoy, Chrang Chamreh Ti

Pir, Kilomaetr Lekh Prammuoy, Ruessei Kaev, Svay Pak,

and Tuol Sangkae. The district lies north and northeast of

the prominent central business districts of Doun Penh and

Tuol Kouk, having easy and quick access to the central city

of Phnom Penh. As combined, Ruessei Kaev district is cur-

rently home to an estimated number of 180,000 residents.

Introduction

The rapid growth in population, increasing traffic pressure,

and rising property prices in the inner city center have all

quickened the increasing rate of urban expansion to many

different suburban parts of the capital, including many parts

of Ruessei Kaev district. Thus, housing demand started to

exist, especially in the suburbs, as a way to accommodate

this rapid growing population.

Landed housing market began in

Phnom Penh since 2002, when a

few of supplies were on the market

and some of the housing construc-

tion work was started for a few hun-

dred housing units in some parts of

the capital. Afterwards, Ruessei

Kaev, one of Phnom Penh’s 12 dis-

tricts, saw a gradual increase in

cluster landed housing market since

2003, when Borey Rith develop-

ment was first launched in Tuol

Sangkae commune (in Ruessei

Kaev district), supplying a rough

number of 700 linkhouse units.

Housing Market Share

As of today, Ruessei Kaev district is home to a cumulative

supply of 12,200 landed housing units (with 86 percent

complete, while some under construction), clustering in

different communes of the district.

Recorded as of 2016, Chrang Chamreh Ti Muoy shares 21

percent (about 2,544 units) of the total cumulative housing

market supply; Chrang Chamreh Ti Pir, 4 percent (465

units); Kilomaetr Lekh Prammuoy, 25 percent (3,085

units); Ruessei Kaev commune, the largest market, up to 29

percent (3,574 units); Svay Pak, 5 percent (597 units); and

Tuol Sangkae, 16 percent (2,004 units).

Market Share by Project

Across Ruessei Kaev district, a number of cluster landed

housing projects have been positioned to offer residential

options for home buyers from different parts of the capital.

The market share dominance as of 2016 was Borey Vimean

Phnom Penh by Ly Hour Development Co., Ltd., sharing

up to 16 percent (1,977 units, 90 percent of which were

3 VTRUST Journal of Real Estate | Volume 2, Issue 1 | Ruessei Kaev Housing Market and Outlook Report 2016 | Page 2 VTRUST Journal of Real Estate | Volume 2, Issue 1 | Ruessei Kaev Housing Market and Outlook Report 2016 |

complete) of the total cumulative supply.

Borey Peng Huoth, Borey New World, and Borey Rith

shared the second largest market in the district, up to 9.1

percent, 8.9 percent, and 8.4 percent (1,120 units, 1,102

units, and 1,035 units, respectively). Nevertheless, there

were also many other projects with fewer than 400 units,

collectively sharing up to 39 percent (4,787 units, 84 of

which were totally complete up to the date of reporting) of

the total cumulative market supply.

Housing Development, Completion, Sale

Performance by Commune

Among the six communes of Ruessei Kaev district, Chrang

Chamreh Ti Muoy had 1,398 units completed, 247 units

nearing completion, and 899 others still under construction.

Overall, the commune achieved up to 94 percent of all units

sold, outperforming the other communes within the district.

Chrang Chamreh Ti Pir fetched a relatively small market

share, having only 465 units in total supply, with 94 units

totally complete, 148 units nearing completion and 223 oth-

ers under construction. About 51 percent of the housing

units there had been sold out.

Kilomaetr Lekh Prammuoy held a relatively large market

stake within the district, having a total supply of 3,085

units, with 1,375 units totally complete, 593 units nearing

completion, and 1,072 others under construction. About 72

percent of the total housing supply there had been sold.

Ruessei Kaev commune took the largest share within the

district, having up to 3,574 units of the total supply, with

2,537 units totally complete, 291 units nearing completion,

and 733 others under construction. About 80 percent of the

total housing supply had been sold out.

Svay Pak had a total of 597 units supplied, without yet any

units complete by then, while 303 nearing completion, and

294 others under construction. About 78 percent of all the

units there had been sold out.

Last, Tuol Sangkae held a relatively large market stake,

having a total market supply of 2,004 units, with 1,850

units totally complete, 28 units nearing completion, and 111

others still under construction. Above all, all of the units

there had been sold at presale stage.

Supply and Completion by Year

Cluster housing market has been around in Ruessei Kaev

district since 2003, with first construction launch of about

739 units by Borey Rith in Tuol Sangkae, a commune im-

mediately adjacent to Boeng Kak Ti Muoy of Tuol Kouk

district to the southwest and Srah Chak of Doun Penh dis-

trict to the south.

Afterwards the construction work of cluster landed housing

started gradually until 2007, when the supply jumped,

bringing 1,275 of new off-plan units into the market. But

global economic downturn slowed down the speed of hous-

ing demand, yet most of landed housing construction work

was not delayed at the time. Until 2012, the economy start-

ed to show sign of recovery, and housing market supply

across the capital started to pick up again, but this time it was

stronger than it used to be during the preceding nine years.

In 2012, site work began for the construction of 2,218 units,

and in 2013 some additional construction work was

launched, bringing 1,859 of new off-plan units into the

market, with a few hundred housing units completed each

year then.

Despite the decline of new supply within the district, con-

struction completion started to grow gradually; and 2016

was the most remarkable year, when 2,827 housing units of

all types were totally completed. Further, by 2017, it is pro-

jected based on the data obtained from developers that an

additional figure of 3,383 units will be finished and ready

for buyers to move in.

Nevertheless, market supply within the district has started

to show sign of slowing down because 2016 and 2017 have

seen no sign of new housing supply, even though it is too

early to predict.


Chrang Chamreh Ti Muoy

Chrang Chamreh Ti Muoy saw the first housing develop-

ment project in 2012, when construction work started for

546 units of the first out of 5 phases of Borey Vimean

Phnom Penh by Ly Hour Development Co., Ltd. In 2013,

two other housing projects were launched construction

work for 1,321 units, the majority of which were shared by

Borey Peng Huoth (the Star Premier).

The trend of the new supply slowed down following those

preceding years, except for housing completion which start-

ed to jump high in 2015 (with 892 units totally complete),

and onto 2017 it is projected that a figure of 1,146 units

will be finished that year.

Chrang Chamreh Ti Pir

Chrang Chamreh Ti Pir held a small market stake, with a

total supply of 464 units recorded as of 2016. In 2009, the

construction work started for 94 units and all of these were

completed in 2010. In 2012, another construction started

for 179 units, and many of them were partially complete.

2015 and 2016 saw new construction launches, with 56

units and 136 units respectively and all of these units are

slated to be totally finished by 2017.

Kilomaetr Lekh Prammuoy

Kilomaetr Lekh Prammuoy hosted up to 25 percent, or

3,085 of the total cumulative housing units supplied into

the market, within Ruessei Kaev district.

The market supply first started in 2006, with construction

work begun for 189 units and finished in 2007. During the

economic crisis, there was no further housing supply until

2012, when 1,207 units were added to the housing stock

and construction work. Then the market went quiet for a

few years until the new supply hit the market again in 2015.

That year, construction work started for 1,317 units, offer-

ing new presale supply into the market. 2016 saw a small

number of new entries to the construction work, yet the fig-

ure of housing project completion hopped on the horizon,

having totally finished off 1,465 units for buyers to move in.

Ruessei Kaev (Commune)

Ruessei Kaev commune fetched the largest housing market

share of the district. The supply began to exist in 2005 from

a small base. In 2007, a few projects with 504 units, includ-

ing one in the area so-called Stad Chas (meaning Old Stadi-

um), were added to the housing stock and launched for con-

struction work. Despite in a small number, the supply went

steadily almost every year since then, but the completion

was remarkable in 2009 (647 units finished), 2014 (651

units finished), and 2016 (821 units finished). Further, based

on the data obtained from the developers, 2017 is projected to

see another completion of 654 units.

Tuol Sangkae

Tuol Sangkae took a share of 16 percent of the cluster land-


ed housing market in Ruessei Kaev district. The supply

grew strongly but abruptly over the course of the last dec-

ade, though all construction projects there were able to be

completed before and during the 2008-global economic

downturn. And it seemed there was no major entry into the

market since 2009 until 2015, when 139 units were

launched and slated to be finished in 2016.

Market Supply by Housing Types

Cumulative Market Supply

Across Ruessei Kaev district, the very small percentage of

cluster landed housing supply was classified as the purpose-

built ‘shophouses’, accounting for only 2.5 percent (290

units), as recorded cumulatively from 2003 to 2016. On the

other hand, purpose-built residential link-houses took the

largest market share, accounting for 84.8 percent (9,711

units) of the total market supply.

Another housing type classified as ‘semi-detached houses’

held the market stake of 9.5 percent (1,083 units), while

‘single detached houses’ accounted for only 3.2 percent

(369 units).

Supply Launched in 2016

New housing market supply launched in 2016 across Rues-

sei Kaev district was collectively 1,174 units, but the ma-

jority of them were link-houses, accounting for 96.7 percent

(1,135 units).

Shophouses accounted for 1.1 percent (13 units) of the new

launches, while semi-detached houses accounted for 2.2

percent (26 units) the same year.

There was no new supply of single-detached houses added

to the housing stock that year.

Cumulative Completion

Recorded as of 2016, a figure of housing completion since

2004 until 2016 was 8,019 units. Under each housing type,

purpose-built shophouses accounted for 3.2 percent (255

units) of the total housing completion.

Link-houses accounted for 83.4 percent (6,686 units), mak-

ing a lead in housing completion.

On the other hand, semi-detached and single-detached

houses as combined accounted for 13.5 percent (1,071

units) of the total completed housing units up to the date of

reporting.

Completion in 2016

In 2016 alone, the number of housing completion in the

district was collectively 2,739 units. Shophouses shared 1.3

percent (36 units), while link-houses took up to 86.5 per-

cent (2,370 units) of the housing completion that year.


Semi-detached houses accounted for 10.2 percent (279

units), whereas single-detached houses accounted for 2 per-

cent (54 units) of the total housing completion the same

year.

Completion in 2017

It is projected based on the data obtained from the cluster

housing developers that, by 2017, a collective figure of

3,389 housing units will be completed. In that, shophouses

shared 1 percent (35 units) of the completion.

Link-houses, on the other hand, will contribute 89.3 percent

(3,025 units) of the total housing completion the same year.

Semi-detached and single detached houses as combined

will contribute 9.7 percent (329 units) of the completion by

2017.

Housing Prices and Sizes

Housing Prices

Pricing of housing units varies depending on the location,

type of the house, and quality of the development itself. In

Ruessei Kaev district, the price range could start from

US$40,000 per unit, for a simple link-house in less attrac-

tive location (but that price was only in the past 10 years),

to almost US$2 million per unit for a single detached villa

in an attractive location as recorded up to date.

However, the average list price for purpose-built shophous-

es in general across Ruessei Kaev district was US$161,100

per unit, while the average sold price was US$155,600 per

unit.

Link-houses were listed on average at US$109,800 per unit

and averagely sold at US$105,400 per units. Semi-detached

houses were listed on average at US$195,700 per units and

averagely sold at US$178,800 per units, while single-

detached houses were listed on average at US$643,000 and

averagely sold at US$595,500 per units.

Market Share by Price Range

Cluster landed housing market in Ruessei Kaev district of-

fered different sets of prices, depending on location, hous-

ing type, and the quality.

Practically, there has not been housing supply with pricing

about or less than US$25,000 per unit, but those with prices

above and up to US$50,000 per unit shared 9.7 percent of

the total current supply.

Housing units with prices between more than US$50,000 to

US$100,000 per unit accounted for 30.6 percent. And

above all, it was up to 41.9 percent of the total housing

market supply with pricing between more than US$100,000

to US$200,000 per unit.

Housing units with prices between above US$200,000 to

US$300,000 per unit accounted for 6.5 percent, and those

with prices above US$300,000 to US$500,000 per units as

combined accounted for 4.8 percent.

However, there was still a market for housing units with

prices of more than US$500,000 to US$1,800,000 per


units, as combined accounting for 6.5 percent of the total

market share.

Housing Size

Sizes of housing units vary across the district, depending on

housing types and development schemes of the housing

projects.

However, based on common market supply within the dis-

trict of Ruessei Kaev, average size of land for shophouses

was between 90 sq.m and 160 sqm, while cover-up area

(built-up) of between 60 sqm and 110 sqm. The total build-

ing area (also GBA) could range from 160 sqm to 200 sqm.

Linkhouses are usually designed for residential purposes,

and thus the sizes are usually smaller than shophouses. In

practice, average land size for linkhouses was between 80

sqm and 180 sqm, with average cover-up area ranging from

60 sqm to 80 sqm and average GBA of 100 sqm to 180

sqm.

Semi-detached houses are designed with wider width but

relative depth (or length) if compared to linkhouses. For

average land size, semi-detached houses were usually

spared with 160 sqm to 300 sqm, depending on sub-types

and specific designs of the houses. Nevertheless, the built-

up area was between 80 sqm and 150 sqm, while the total

building area could range from 230 sqm to 300 sqm.

Above all, single-detached houses are larger and more ex-

pensive than another other housing types in the market. Av-

erage land size reserved for a single detached house could

range from 350 sqm to 780 sqm, while its over-up area

could be between 160 sqm and 280 sqm. And GBA could

range from 470 sqm to 600 sqm.

Housing Market Outlook

Cluster landed housing market in Ruessei Kaev district

grew strongly within the past-five-year period, with average

launches of new 1,600 units into the market every year be-

tween 2012 and 2016, while about 2,800 and 3,380 units

will be finished by 2016 and 2017, respectively.

Both sales and construction work performed well recently,

with current completion of 86 percent compared all units

launched for construction so far. Achieved sales rate was up

to 83 percent, meaning only 17 percent were still on the

market inventory. Despite a slight slowdown since late

2015, market absorption was relatively good within recent

years, and this trend still continues to grow well in the next

following year, given the overall favorable performance of

cluster landed housing market within the district.

The continued growth was thanks to housing market stimuli

(such as minimal or zero down payment schemes and other

very flexible installment options, to name a few) initiated

by developers across the capital’s housing market in the

midst of 2016, also helping bolster the demand and keep

the market growth from slowing down.

Regarding take-up rate, the majority of the finished housing

units are occupied, though relocation of residents to take up

the finished housing projects may take some time, about 3

to 6 years on average. Still, speculative purchases of hous-

ing units in primary market will still continue to leave some

of finished housing units empty due to slower secondary

demand than the rate of housing completion, especially in

2016 and onto 2017.

Because the district of Ruessei Kaev is immediately adja-

cent to the capital’s central business districts, it has now

become residential hubs, where residents can access to the

business centers easily and fast if compared to the far-west

districts of the capital. For a long perspective vision, the

trend of landed residential developments over there is fore-

seen to advance strongly until the coming decade, as infra-

structure, communities, and amenities such as AEOM Mall,

international schools, hospitals, and many other comple-

mentary services have already been positioned across the

key hubs, offering residents conveniences.

Some vacant parcels of land along some key streets of

Ruessei Kaev, namely St. 598, are under planning and

could be turned into residential towns in the foreseeable

future

Satellite view of cluster housing spots in Ruessei Kaev district. Note: Starred spots are indication of landed and borey housing clusters. Photo: Google Earth Imaging.

1.9 km

8

Contact VTrust Appraisal Co., Ltd. Parkway Square, Mao Tse Tong Blvd., Phnom Penh, Cambodia Contact: (+855)23-220-098 Email: [email protected] Website: www.vtrustappraisal.com Century 21 Mekong Parkway Square, Mao Tse Tong Blvd., Phnom Penh, Cambodia Contact: (+855)23-966-577 Email: [email protected] Website: www.c21mekong.com.kh

Author Hoem Seiha (Mr.) Director of Research | VTrust Appraisal Co., Ltd. Tel: +855-23-220-098 | H/p: +855-12-699-553 Email: [email protected] Website: www.vtrustappraisal.com Advisory Research Committee Sim Hoy Chhoung | CEO | VTrust Appraisal Chrek Soknim | CEO | Century 21 Mekong In Sitha | Business Development | VTrust Appraisal Tarek Genena | Consultant | VTrust Appraisal Phin Sopthea |Valuation Manager| VTrust Appraisal

23 November, 2016 Volume 2, Issue 1

A Publication from In Partnership with

Disclaimer VTrust Appraisal Co., Ltd. informs that the information, including figures, statistics and opinions, is one gained from resources deemed reliable and expressed solely by the authors of this publication but does not necessarily reflect the viewpoints of VTrust Appraisal Co., Ltd. Therefore, VTrust Appraisal does not guarantee or bear any responsibility for any failures pertaining to the information contained herein.

Valuation Services

Property ● Asset ● Pre-IPO

Research & Consultancy

Market ● Feasibility

Contact: (+855)-23-220-098

Brokerage Services

Buy ● Sale ● Rent

Contact: (+855)-23-966-577

vtrust journal of real estate - housing market & outlook...

Documents