Aside from the aggressive discounts available in the market, ongoing with the oversupply of condominium units, real estate developers are being urged to come up with new strategies to hit or keep up their sales targets, as sales have remained flat for most condominium developments, with the price collapse most noticeable in Sihanoukville.
Affordability has become one of the determining success factors for condominium developments. The market is experiencing a buyer’s market, therefore making developments in prime locations more affordable one of the strategies developers can apply to expand their buyer base, or downgrade and relaunch their existing developments with a lower asking price than originally planned.
Amid slow market conditions, reducing prices and solely relying on sales alone might not be enough to generate recurring income. In this situation, developers can rent out unsold units in completed developments; this will boost the overall liveliness of their projects and eventually increase the profitability of the development. On the other hand, any unnecessary overhead costs can be cut down in order to increase the overall level of profitability.
In the future, successful developments will be those located near shopping malls and schools, where these developments will be able to achieve higher level of sales, since buyers in these developments are predominantly end-users, or buy-to-rent investors who saw a clear rental demand from the expatriates and their families in the area. Developers can also turn their focus to newly-developed residential areas.
For example Sen Sok in Phnom Penh has been seeing more retail developments to serve upcoming residential developments in the area. Residential developments launched in this area within kilometres from Aeon Sen Sok City, Global House or the upcoming Chip Mong Sen Sok Mall are easily sold out, or able to achieve a high sales performance despite last year’s slow market.
Looking at the successful developments, it is evident that affordable pricing in attractive locations with clear characteristics are factors contributing to achieving sales targets. Developers who are able to sell in this slow market are mostly responsive to changes and will most likely be those fast enough to adapt to today’s competitive market.
In addition, developers must be more thoughtful with their product design, and focus on undersupplied locations with opportunities for growth, adjust with the changing market in terms of sales strategies and promotions in order to satisfy the market demand.