Cambodia has always been one of the famous tourist attractions in the world for its Angkor Wat. Adding on to the attraction, there are many other factors that generate the value of Cambodia's real estate. Here are some points on why you should invest in Cambodia' s real estate:
Cambodia is nestled between Thailand, Vietnam and Laos, three strong economies in ASEAN, and also 2 of the world’s largest and fastest-growing economy, China and India.
Besides that, by being a part of China's Belt and Road initiative, Cambodia will become a major part of the Southeast Asia network, which would further facilitate its growth and provide ample opportunities for business.
With the past few years of steady GDP growth of around 7 per cent (GDP growth rate as at 2019 hit 7.1%), Cambodia is on a steady path of economic improvement. The growth rate is the highest amongst the fast-growing ASEAN nations.
Both its industry and service sector plays an important role in Cambodia’s economy.
Cambodia’s strong economic growth is the result of Foreign Direct Investment. The analysis shows that FDI had increased by more than 800% in the last 10 years especially in the construction and real estate sector.
Besides, the country has very open investment laws and offers a range of incentives to investors such as no visa restriction, no currency differentiation and tax exemption.
The youthful population with an average age of 27 years old also play a key role in economic development.
Cambodia has the highest labour force rate in Southeast Asia with a relatively low labour cost and zero unemployment rates.
This has attracted a lot of foreign investors especially from mainland China, Hong Kong and Singapore to expand their businesses in Cambodia.
In recent years, tourism has become one of the most important sectors in contributing to Cambodia’s economy.
The total number of international tourist arrivals increased by 6.6% to 6,610,592 visitors in 2019.
Its tourism industry is getting popular especially with its renowned world heritage site of the Angkor Wat in Siem Reap, Sihanoukville and Phnom Penh, its capital city.
Based on the tourism statistics report of December 2019, top 10 visitors came from China (the highest), followed by Vietnam, Thailand, Korea, USA, Japan, Malaysia, France and UK. The international business-related travels into Cambodia increased by 100%.
With such rapid growth of tourists in recent years, Cambodia has gone through massive expansion plans to improve its infrastructure and its international airport.
Even though Cambodian Riel (approximately USD $1: Riel 4,101) is the official currency of Cambodia, the US dollars are commonly used on all the major day-to-day transactions such as business dealings, investments and even when selling or buying properties in Cambodia.
Cambodia is the third-largest country in the world and the only country in Southeast Asia to use USD, which accounts for more than 80% of the country’s currency.
There is also no foreign exchange control, so capital is free to enter and exist at any time.
Cambodia's foreign property ownership regulations only opened up in 2010.
Ever since that, foreigners can freely own any freehold ownership of strata-titled properties, i.e. condominium or apartment above the 2nd floor or a maximum of 70% of foreign quota.
There are no restrictions on the amount of investments and foreigners are allowed to exit at any point of time and sell them to anyone. The only setback is that foreigners are not allowed to own lands.
Owning property is still very affordable in Cambodia as compared to China, Hong Kong and Singapore. An average Cambodian property price of a condominium in the city centre of Phnom Penh are transacted at around US$ 2,000 to 3,000 per square meter; only one-third of the price of other Asia countries.
Even though Cambodia’s property prices have gone up in the past few years, these figures are still relatively low when compared to the global average.
Cambodia’s real estate has seen tremendous growth in the past several years, one of the highest increments in the Asia-Pacific region.
In Phnom Penh, the main capital of Cambodia rose to an average price of 15% due to its strong economic growth as well as the passing of the legislation of foreign property ownership.
Land price in Phnom Penh had a sharp increase since 2010 till 2018.
Phnom Penh, the biggest city in Cambodia is a preferred location among many Chinese, Singaporean, Taiwanese, and Hong Kongers as the average rental yields in Phnom Penh are high, where you can get at least 6% to 8% in return.
Hence, massive high rise developments are currently under construction, especially in the downtown of the Capital.
This article is written by Mandy Chen.
Editor: Seven Cheah, Hoy Yan Moh