Cambodia Real Estate continues to develop with commercial buildings, condominiums and apartment complexes being built in all population centres around the country. The growth in the Cambodian property sector has been nothing short of phenomenal, with city skylines now transformed by high rise apartment and commercial buildings. Comparative economic forecasts for Southeast Asian countries (World Bank)
Compared to many ASEAN countries, you can purchase properties in the country for $1,000 per sqm or less. Real Estate in Phnom Penh can range from as little as $150 per sqm in the lesser known areas to as high as $9,000/sqm in the city center. These properties can be converted to residential spaces that has an attainable 6-8% rental yield and 1% – 5% capital growth.
Latest figures reported by Global Property Guide sets rental yield in Phnom Penh at approximately 5.33% yearly (third highest in Asia) and rentals averaging at $2,913 in the city center, which is second to the lowest amongst Southeast Asian countries.
To start investing in Cambodia, there are general aspects that foreigners need to understand in order to make an informed decision. To name a few, research should be done on the ROI timeframe, property tax laws and corresponding laws affecting foreigners, and the types of property ownership.
Cambodia is pegged as a frontier market. Frontier markets, also known as pre-emerging markets, are countries that are more developed than the least developed countries but still less developed than the emerging markets. In contrast to many established countries, frontier markets have a young, growing population that contributes to a developing workforce and additional domestic consumption.
Frontier markets provide interesting investment opportunities to long-term investors and offers potential for major growth and development in a few years’ time. With 60% of the Cambodian workforce estimated to be below the 30’s age bracket, the country is seen as a young nation moving towards rapid growth, and as such, is a significant area for long term investment opportunities (B2B Cambodia).
The Cambodian property market proved very resilient in 2018 and it is expected this will continue into the near to medium term. It is expected that the rental yields to soften somewhat as further condo supply hits the market in 2019 but predicts sale prices to remain strong as property continues to be viewed as a safe investment by both local and foreign investors (David Murphy, IPS-Cambodia Managing Director).