Sothie and Samnang, who are good friends, have rarely met one another at their regular café because they need to earn a living after the pandemic. After months without chit-chatting, Sothie finally phoned Samnang for a coffee along the sidewalk of downtown Phnom Penh. Sothie arrived quite early…

Sothie: Samnang! Why are you so late?

Samnang: The traffic was terrible. Plus, I was spotting houses that are put on sale or rent. I saw quite a lot of them.

Sothie: Good timing! I was also about to ask you about the real-estate situation.

Samnang: Look no further than this cafe we usually come to. Before COVID-19, many people talked about the boom in real-estate prices. Now, people disappointingly shake their heads. They still do not know when this sector will recover.

Sothie: So, when do you think it will recover?

Samnang: It is hard to say. Conflicts in the middle east, Ukraine, Russia, the global economic status as well as the economy in our country… prices of real estate may not recover anytime soon as people wanted it to.

Sothie: Now, people complain about the situation. They cannot make revenue from their lands and houses. The money is frozen in cement and soil.

Samnang: Some people may have more lands and houses, but they do not have the money to readily spend. Those profits they earned were put into buying construction materials or expanding their real-estate sizes. Plus, some bought cars and material equipment. Counterintuitively, now they have less “money”.

Sothie: But if our economy continues to gradually increase, will the value of the real estate increase too?

Samnang: Oh, I cannot say. I am not an economist or real-estate agent.

Sothie: I know, but I just want to hear your thoughts.

Samnang: Okay, take my ideas as a grain of salt. If the economy increases, the real estate value will also increase. However, don’t forget that the ideas behind real estate are not something solid as written in textbooks. This is mostly all about human psychology. So, the psychology now is that many people are trying to sell their land and houses. This lowers the price. Basic supply and demand. The real estate value will continue to be relatively low even though the general economic status of the country is growing.

Sothie: That sounds like the market is saturated…

Samnang: Perhaps yes. Some land sellers even sell below market price and there is still little demand. Let me add something. High real estate value can also hurt investments since investors also need to pay more to do business. If the real estate is more gently balanced, the investors can also need to pay less.

Sothie: Well, from what you said, I don’t think I will earn a profit from the land I bought several years ago anytime soon…

Samnang: You cannot even know if people will buy your land, Sothie.

Sothie: What a disappointing situation for me!