Cambodian property market. Image: B2B Realty
Cambodia was the only country in Asia that skipped the Financial Crisis in the 1990s. It also avoided the tech bubble of the early 2000s and even ducked the 2008 Financial Crisis. So why is this country so lucky? It’s because the country is a frontier market and is less associated with the global economy.
Being in the frontier market means the country undeniably attracts many foreign real estate buyers and investors. The bustling capital of Phnom Penh is also attracting many multinational corporations to set up their businesses there. With droves of well-paid expats spending their six-figure salaries there, that means finding residential projects to meet their standards might become a problem. Foreigners can own strata titles for condominium units under their own names. However, strata titles are not permitted for land or shophouse apartments. Annual property taxes are 0.1 per cent of the property’s market value in excess of 100,000,000 Khmer riel (approx. US$25,000). Foreigners enjoy freehold ownership and total control over their properties if they follow the books. Quite simply, you can profit by investing in such frontier markets especially if they are not overrun by foreign capital and large investment firms. One can buy a Cambodian property in Phnom Penh for merely US$1,000 per square metre. That’s in the same league as less developed cities such as Dhaka, Bangladesh, Pakistan, and Karachi.
The country currently offers expat-quality housing in several key areas such as Daun Penh, Chamkarmon, and 7 Makara. Without a doubt, Cambodia remains one of the most exciting places in Asia to plonk your money in real estate investment.
Sky Villa is a luxury residential condominium in 7-Makara district, Phnom Penh. Photo: Knight Frank
The Cambodian real estate market in 2022 looks set to be a hotbed of activity, especially for expats and local investors. In a clipping from The Phnom Penh Post, Minister of Economy and Finance Aun Pornmoniroth stated with optimism that despite the economic uncertainties of the pandemic, investors can still benefit from its moderately low prices, particularly in areas that have received growing interest and witnessed a progressive surge in investment activity.
Cambodia’s real estate sector has been attracting interest from neighbouring countries with reasonable low prices for investment. Backed by findings from the Annual Global Retirement Index by International Living (IL), Cambodia (tied with Bolivia) is the third-cheapest place in the world to live in 2022.
Cambodia’s bustling metropolis is replete with high-end retail options, restaurants, malls, skyscrapers, and a robust healthcare system. Even with Phnom Penh being the most expensive place to live in the country, expats and foreigners still live well for a fraction of the cost one would spend “back home”.
Other flourishing localities include Siem Reap for its investment potential and touristy sights, while Preak Sihanouk province with its upcoming new airport and major development projects is catching the eye of many investors.
Leedon Heights, in the Sen Sok district of Phnom Penh, next to Aeon2. Photo: CBRE Cambodia
Local investors are wooed by carrots dangled by developers as borders remain shut. Developers have to re-evaluate their sales and marketing tactics to meet the demands of local buyers, including lowering prices.
Some developers are looking to pull back from the mid-range segment’s growing competition in 2022 and focus their strategies to create higher-quality residential units with unique differentiation. In the next 12 months, it will be a buyer’s market with many developers poised to increase their prices. “As condo prices become more accessible to not just expats and foreigners, but also to locals, the more stable and less prone to risk the market is going to be,” opined Cambodian real estate investment specialist Peter V. Guboglo.
For more property reads, click here.