Cambodia is a country that is seeing an increase in foreign investment, especially in the real estate market. Foreign investors see that Cambodia’s growing economy has a lot of potentials and are taking advantage of the opportunities. Cambodia is an excellent place to invest in property. The economy has been overgrowing over the past few years, and there is still plenty of room for growth. Also, the country has a lot of potential for rental income since rents are increasing all over Southeast Asia. Cambodia has minimal restrictions on foreigners owning property, making it an attractive investment opportunity. Home and business prices are still pretty low compared to other countries in the region.
Current Market Condition in Cambodia
Whether you want to live or make an investment, Cambodia has a lot to offer. Its currency has been stable for a long time, so prices keep increasing yearly. There has yet to be a bubble, though. From a business point of view, it’s in a good spot because it’s in the middle of Southeast Asia and close to big markets like China and India. And if you’re looking at real estate instead, don’t worry about the fear, uncertainty, and doubt. The low cost of living (even compared to other ASEAN countries) and the stunning natural scenery throughout the country make this kingdom an attractive tourist destination even today.
In 2021, the country’s economy grew by 3%, despite a pandemic. In 2022, this growth will likely be between 4% and 6%. Depending on where you get your information, in 2022, the inflation rate will have risen to 4.7%. In 2023, the expected drop is 2.2% based on current economic trends.
An international rating agency called Standard & Poor’s (S&P) has recently said that Cambodia’s GDP will reach 6.3% this year. Chea Chanto, governor of Cambodia’s National Bank, predicts a 5.3% growth in 2022. World Bank, IMF, and ADB all made lower predictions.
Cambodia is already getting benefits from RCEP, which stands for Regional Comprehensive Economic Partnership. Cambodia’s exports to the other RCEP countries in the first half of this year were $3.28 billion. As time goes on, there will be more job opportunities due to the increase in production. Cambodia will also benefit from the RCEP’s rules for members to share knowledge, and more foreign direct investment will flow into construction and property development.
What to expect from property purchase in Cambodia
Even though the global economic crisis continues, real estate will likely be the most profitable industry in 2023. While many other sectors struggled to get back on their feet, the real estate market quickly got back on its feet, with prices for commercial properties shooting up fast.
Since then, the value of other real estate properties, like land and homes, has increased significantly. It is an excellent time to start a business in the real estate industry. Make sure to research and make the most of the opportunities offered by the sector in Cambodia, as there are many different kinds of businesses that you could start up in this market there.
Investing in real estate in Cambodia allows you to expect a healthy return on your money within a reasonable timeframe. Prices are still low compared to other regional markets, but they will rise as Cambodia’s economy grows. A wide variety of housing options will likely be available to you in Cambodia. You’ll be able to find what you’re looking for in Cambodia’s real estate market, whether that’s a posh beachfront villa or a more affordable condo in the middle of the city. And last but not least, you can expect a friendly greeting from the people of Cambodia. They are well-known for their hospitality and will ensure you are comfortable in your new home when you arrive.
Type of Real Estate in Cambodia
Cambodia has a wide range of real estate and property options, some of which are less common than others.
Detached Houses / Villas
Most detached houses have at least 800 square meters of land and can have anywhere from two to four levels of living space. These homes are prestigious. They usually have a garden or landscaping, a swimming pool, and other water features. They are in some of Phnom Penh’s best areas. Toul Kork is among the most sought-after localities for constructing detached houses like these.
Most of the time, these homes are between 500 and 1,500 square meters, have at least 5 to 8 bedrooms, and have several bathrooms, some right next to the bedrooms.
Semi-detached Houses / Villas
Houses classified as semi-detached require a lot that is at least 250 square meters in size and can have as many as three storeys. Because these homes are usually built in gated, guarded communities called “borey developments” in Khmer, middle-class Cambodians with families are choosing them more and more.
Within these communities, residents have access to various amenities, including a fitness center, spa, sauna, clubhouse, swimming pool, and playground. The districts of Toul Kork, Sen Sok, and Chroy Changvar are home to the most borey developments.
Each house has at least four and up to six bedrooms, some of which have bathrooms.
Terraced or Flat House Apartments
The lot must be at least 70 square meters for a terraced house, and they can usually be between two and three stories tall. Most of the time, these are in boring neighborhoods. They are similar to the semi-detached houses we discussed earlier, and they have the same shared amenities as those other housing types.
Because of the reasonable rents, it is also becoming an increasingly popular choice among Cambodians of the middle class and Asians living in Cambodia from other countries. In most cases, these houses have four bedrooms, of which two have private bathrooms.
Terraced flat houses require a land area of at least 70 square meters and can have anywhere from one to three levels. The majority of these are in Phnom Penh (riverside area). Businesses like restaurants and bars are usually on the lower floors of a building, while apartments are generally on the upper floors.
Expats from the West often choose this type of home as their preferred living situation. On the other hand, they don’t have basic things like an elevator, parking, or security. The apartments typically have a minimum of two bedrooms, each of which has a private bathroom, a lofty hall, and a balcony. You can get a beautiful view of the river from the balconies of the apartments that face Preah Sisowath.
The traditional Khmer-style interior goes well with Cambodia’s wooden furniture. The best thing about these properties is their location, which is close to trendy cafes, restaurants, bars, and pubs that locals, expats, and tourists like to visit.
Serviced Apartments and Condos
Most expats and international workers in Phnom Penh choose to live in serviced apartments or condos as their primary place of residence. They range from studio apartments to penthouses with four or more bedrooms and come in various layouts.
The neighborhood highly influences rental prices, with Chamkarmon, Daun Penh, 7 Makara, and Toul Kork coming in first, second, and third, respectively. Minimum sizes start at 30 square meters.
Tenants typically have peace of mind when moving in because the unit is fully furnished. Most serviced apartments come with a linen service and a cleaning service every two weeks, so tenants don’t have to find their own housekeepers to keep the apartment in good shape.
Real Estate Agent Checklist
Finding the best real estate agent who can work in Cambodia is necessary. For them to help you find the best property, especially in Cambodia, they need to have a lot of experience, a history of being reliable, and a deep knowledge of the market. The real estate industry in this country is almost entirely unregulated, and there are a seemingly endless number of people who call themselves “estate agents,” despite having neither the necessary experience nor the necessary credibility. Finding a reputable agent to represent your interests can take time and effort. We’ve made a list of qualifications and qualities that a real estate agent in Cambodia should have to help you decide who to hire.
Agent Must Know The Local Market
For real estate agents to be successful, they need to know a lot about how the local real estate market works. The process can be complicated and determined by many factors when buying or selling a villa or apartment. The real estate agent you hire must know the average cost per square meter for purchasing a home. In addition, the typical prices asked by customers Without a doubt, the data do not qualify him as a price expert. Therefore, you should ensure they can use the costs in a particular market to assist you in purchasing a property at the best possible price.
Cambodian Land and Rent Law
In an ideal situation, you will have to learn about Cambodia’s laws about land and renting it out. However, experienced Cambodian real estate agents can provide helpful guidance.
If you’re a foreigner, they must tell you the criteria for buying or renting a property in the country. Also, explain the critical distinctions between a hard title deed and a soft title deed. They should be able to guide you through the different legal steps so that you can choose the form of ownership that gives you the most protection.
Information on Chosen Neighborhood
Look for a local expert familiar with the area you want to settle in. Experienced real estate agents who pay attention to detail are incomparable regarding their familiarity with a particular area. You can expect them to give you reliable information and data on crime, schools, and demographics in the area, identify sales that are comparable to what you’re looking for, and provide you with a list of similar deals. To be successful as a real estate agent, one needs to have in-depth knowledge of a particular area. For example, your real estate agent needs to know what causes the high number of foreclosures in a specific area or why certain areas might not be a good choice for investments.
Competence in Negotiations
Real estate agents need to be able to negotiate deals. Unlike most sellers, buyers, and tenants, they must be emotionally detached. They must be capable of handling the negotiations on their own, whether they are settling the monthly rent or the sale price. They are not representatives of any organization. So, a real estate agent’s job is more than just making a purchase offer to a potential seller.
A referral is an essential factor in the success of an agent. On social media, you should be able to locate former customers. For instance, friends, family, or even blog readers, and you need to inquire whether they would suggest that agent. Inquire with them about the agent’s level of professionalism. Find a knowledgeable professional in the field you plan to invest in if you want to make wise financial decisions.
An Experienced Real Estate Agent is a Must
It is impossible to magically appear on the scene as an experienced real estate agent. The establishment of a solid track record requires a significant investment of time. Your real estate agent should give you a copy of their background, and they should also tell you about any experience they have had working with international buyers in the past.
It would be best if you asked them to perform a comparative market analysis to get information about what they have done in the past and what they are doing now. Keep in mind the number of homes sold, the average selling price, and the time the houses have been on the market.
A Real Estate Agent Must Meet Clients' Expectations
Buying or selling real estate in Cambodia can be very stressful. Make sure you are completely honest about what you want and expect.
Finding a real estate agent who is honest and upfront about the potential downsides of investing in a property is another crucial step in the process. Another critical step is to get a real estate agent who is honest and upfront about the possible downsides of investing in a property.
Find a real estate agent who can provide facts and talk you through the process and actual data about the local market’s performance, investment analysis, and the impact of your decision.
If you are interested in Cambodian real estate or are just curious about what is available and the current market conditions, keep reading. This blog post will tell you what to expect if you buy property in Cambodia, as well as introduce you to some of the different types of real estate available here. We also have a checklist for anyone looking to work with a Cambodian real estate agent, so be sure to check that out at the end. Have you invested in Cambodian real estate? Please tell us what you think in the comments.