Cambodia’s property market is booming, and at its heart sits the capital of Phnom Penh. As construction continues to dominate the rapidly developing city, both local and foreign investors are tapping into the potential this growing market offers.
Industry insiders claim the growth is being driven by the rise in quality condominium offerings, which offer attractive returns in comparison to countries such as Thailand, Malaysia and Singapore. According to research conducted by property experts CBRE, early investors who purchased in centrally located developments enjoyed capital gains of up to 30 percent from off-plan purchases in 2014.
The capital’s mushrooming market continues to appeal predominantly to the wider Asia Pacific region, with CBRE research revealing and increase in investment coming from Singapore, Hong Kong, Japan, China and Korea. However, last year saw a steady rise in the number of affluent Cambodians investing in the condominium market.
This boom is a trend that looks set to continue into the future. The latest data from international property experts, Frank Knight, in its Asia Development Index puts Cambodia ahead of other ASEAN countries. In the first half of 2015, the average growth of property prices across the ASEAN Economic Community (AEC) slowed from 3 percent to 1.1 percent.
However, Cambodia was the only country to buck the trend, surging by 14.1 percent. Experts put this down to the comparatively low property prices and the relative ease with which foreigners can buy freehold premises – a recent law allows foreigners to purchase property above the ground floor in a building with a registered strata title that was constructed after 2006.
Demand for residential space is expected to increase into 2016, as Cambodia’s economy grows – the country’s GDP hit an all time annual high of $16.71 billion in 2014. And as the expatriate driven central areas of the city become more developed, outlying areas, such as Chroy Changva, are predicted to be the next hotspot for business-savvy investors as foreign nationals seek exclusive, high-end accommodation.
With development taking place in central Phnom Penh at a staggering rate, available space is rapidly running out, leading to an inevitable overspill into the outskirts of the city. Chroy Changva, which sits on the other side of the Tonle Sap River from the capital’s riverside, has seen a spike in activity.
Development is rife on the peninsula, with improved infrastructure, such as the opening of a second bridge and the on going widening of the national road, prices have almost doubled in the last year. The stretch of riverside that runs from the new Sokha Hotel to the Japanese-Cambodia Friendship Bridge has also been revamped and boasts paved sidewalks, colonial street lamps, and neat rows of frangipani and umbrella trees.
Future plans to introduce a water taxi or boat service to connect the two sides of the river are currently being considered, as are seven to eight satellite cities that will transform the area. And as more development is mooted across Cambodia, investors are flocking to tap into this burgeoning market.