Is now the best time to invest in real estate in Cambodia?
Ever since the passing of legislation on foreign property ownership in April 2010, Cambodia’s property market has exploded. Since 2011, Cambodia has consistently achieved an average of 7% GDP growth, while all major industries, including real estate, are only becoming more lucrative. Cambodia’s economy shows no sign of slowing down. Tourism, the housing market and manufacturing are all experiencing major growth throughout the region, adding to the steady increasing in Cambodia’s economic stability.
Last year’s 14% increase in tourism proves that Cambodia’s tourism and textiles industry continues to boom, yet only 8% of construction projects last year were commercial properties, and many of which were office buildings and factories.
This leaves a fantastic opportunity for potential investors. Within the next decade, the tourism industry is set to rise even further with tourists flocking to experience Cambodia’s exciting culture and vibrant landscape. There is huge scope for commercial properties tailored to tourists (such as hotels or hostels) to be built in order to meet this increasing demand.
In the last 5 years, more than 3,500 construction projects, totalling $6 billion saw the positive trends in Cambodia’s housing market continue. 90% of these construction projects were backed by Asian investors.
Making up the majority of construction projects: housing condominiums and other more affordable housing options create better, more affordable living opportunities for locals and therefore comprise 82% of all construction projects in 2018. This trend looks likely to continue over the next decade.
According to reports, more gated communities will be built in the year 2020, as well as moreapartments and houses in order to meet the high demand caused by increasing interest from neighbouring countries like Japan, Singapore and Korea. This has led to overcrowding in certain urban areas.
The overcrowding does however create plenty of real estate opportunities for potential investors, particularly in light of Cambodia’s steadily increasing population (estimated at 16.6 million as of January 2020). Land can be purchased at a very reasonable price and with local principalities keen to meet housing demands, negotiations and permissions fall favourable towards investors regardless of their origin.
Manufacturing and Trade
Through 2019 garment and footwear contributed to 69% of Cambodia’s yearly exported goods. An increase of 7.17% was seen and North America and Europe remained the biggest trading partners. Cambodia exported $10.8 billion of goods in the first 10 months of 2019, up 6.4% on the previous year, a clear indication that the trends in growth are set to continue.
With new developments occurring across the region and heavy investment from Super-power China, the Cambodian economy is to continue to enjoy the upsurge in economic growth well into the new decade.