Did you know foreigners can have 100% ownership and there are no trade restrictions in Cambodia? And no price control is put in place!
Before we look into property investment in Cambodia, let's find out the demographic of Cambodia.
Nicknamed the Kingdom of Cambodia, located in the southern portion of the Indochina peninsula in Southeast Asia and surrounded by neighbouring countries such as Thailand, Laos as well as Vietnam.
As of 9 September 2020, its population is 16,718,965 based on Worldometer elaboration of the latest United Nations data. It's a relatively small nation with its community. It is equivalent to 0.21% of the total world population. And the median age in the country is 25.6 years; hence it's a relatively young generation of the community.
Foreigners can buy or invest in property in Cambodia, but there are some restrictions. Foreigners can only own property on the first floor, or higher (not the ground floor), up to 70% of anyone building and they are not allowed to purchase landed property. Besides, there is no minimum investment amount required to buy; all they need are a current passport and of course, cash only. There is no mortgage option available for a foreigner when coming to property investment except some established developers offer short term funding.
So where to invest then?
Here are the three main cities where the majority of foreign investors will look into:-
Phnom Penh is the capital city of Cambodia. Also the largest in terms of population - has a population of 1,501,725 people. Due to its popularity, It has attracted the most foreign investors and became has grown to become the nation's economic, industrial, and cultural centre. All major Phnom Penh, real estate markets, are overgrowing for past few years. Massive development in the city ranging from luxury to affordable; be it from local developers or China, Hong Kong, Singapore and Malaysia.
The median price for an apartment is still around USD2,000 per sqm. Average apartment prices ranging from USD$90,000 to 300,000 depending on the size and location of the property. The rental market could fetch from USD500 to 2,000 per month, depending on the property details. Generally, the rental yield can easily hit 6 to 8% per year.
Siem Reap is the 2nd largest city in Cambodia, internationally known as a tourist destination, especially its world's most massive religious structure - Angkor Wat. It is one of Asia's most visited attractions drawing more than 2 million tourists each year. Hence tourism is one of the major economic drivers of the city and created a lot of job opportunities for the locals. Therefore, the city has a vast market for rentals that accommodate both locals as well as foreign tourists on a short term holiday home. Though not many luxury developments in Siem Reap yet, there are still many apartments in and around the city centre, and property price is slightly lower than Phnom Penh.
The median pricing for an apartment is around USD$68,000 to 163,000 depending on the size and location of the property. Median rental is around USD400 to 450 per month also depend on the size, location and furnishing of the apartment.
Sihanoukville is a coastal city in Cambodia, a four–hour drive from Phnom Penh - flanked by an almost uninterrupted string of beaches along its entire coastline. It has some of Asia's best beaches and premier seaside resort. Also, it has one of the cheaper Asia's beachfront and beach view property. In the past few years before Cambodian government ban the gambling license, this city flooded with thousands of mainland Chinese workers, developers and investors settling here.
The amount of Chinese residing here had contributed almost 90% of the total expat population in this city, which helped the Sihanoukville property prices double up between 2016 and 2018 and rental yield with double digits. But property sales and rental seem affected tremendously ever since the online gambling business was banned early this year. In Sihanoukville, the apartment prices ranging from USD$90,000 to 180,000, and the median property price is around USD$116,000 as at now.
This article is written by Mandy Chen.
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