The construction ministry has reported that it approved 1,175 projects in the third quarter of 2022, up 14.30 per cent year-on-year from 1,028, most of which were residential developments.
This increase was mainly buoyed by villas and other residential developments, industrial facilities and privately-financed public works, while projects related to the commercial and tourism sectors lagged behind, the Ministry of Land Management, Urban Planning and Construction said.
The ministry forecast that the Cambodian construction sector would grow three per cent this year, “supported by credit growth”.
Housing Development Association of Cambodia (HDAC) secretary-general Huy Vanna told The Post on December 5 that, when compared to a year earlier, there were no significant changes in the low numbers of construction projects that broke ground in the July-September quarter, especially when it comes to large foreign-owned projects.
Vanna attributed the current calm in the construction sector to a slowdown in global economic growth, geopolitical disputes between major powers and particularly the sharp decline in number of Chinese investors largely as a result of Beijing’s zero Covid policy, which he said creates obstacles for travel abroad.
He opined that a decent portion of the 1,175 projects given the ministry’s green light during the third quarter should have a relatively distant future date planned for their groundbreaking.
“On the ground, barely any new projects began construction in the third quarter – work merely progressed on existing developments,” Vanna said. He declined to offer an outlook for the sector’s performance in the fourth quarter.
Vanna explained that the construction sector should take longer to rebound than other sectors, notably due to the sizeable share of large Chinese-owned projects in Cambodia, but that recovery could be accelerated by a marked influx of Chinese visitors and investors.
Global Real Estate Association president Sam Soknoeun remarked that real estate transactions and rentals have been very quiet in the second half of 2022, comparable to 2020-2021 despite the easing of Covid-19-related travel restrictions.
“As I see it, the real estate market has not improved in the third and fourth quarters. The sluggishness of the market will linger on,” he predicted.
Soknoeun blamed the declines in construction activity and home transactions seen in recent months to a supply glut as consumers continue to save money.
The construction ministry reported that it approved 4,303 projects nationwide in 2021, representing a floor area of 12.998 million square metres, and registered capital of $5.334 billion, down 31.21 per cent from $7.75 billion in 2020.