10 Compelling Reasons to Invest in Cambodia Real Estate
Cambodia, known globally for its iconic Angkor Wat, has much more to offer than just its rich cultural heritage. The country presents numerous opportunities for real estate investors. Here are ten reasons why investing in Cambodian real estate is a smart decision:
1. Strategic Location
Cambodia is strategically located between Thailand, Vietnam, and Laos, three robust ASEAN economies. It also neighbors two of the world’s largest and fastest-growing economies, China and India. Being part of China’s Belt and Road Initiative further integrates Cambodia into the Southeast Asia network, enhancing its growth potential and creating ample business opportunities.
2. Strong GDP Growth
Cambodia has experienced consistent GDP growth, averaging around 7% in recent years (7.1% in 2019). This growth rate is among the highest in ASEAN. The country’s economy benefits significantly from foreign direct investment (FDI), which has surged by over 800% in the past decade, particularly in the construction and real estate sectors. Cambodia’s investor-friendly policies, including no visa restrictions, no currency differentiation, and tax exemptions, make it an attractive investment destination
3. Young Population
With an average age of 27, Cambodia boasts the youngest population in Southeast Asia. This youthful demographic translates into a high labor force participation rate and low labor costs. Zero unemployment rates have attracted substantial foreign investments from China, Hong Kong, and Singapore, driving economic development and business expansion
4. Booming Tourism Industry
Tourism is a vital sector for Cambodia’s economy, with international tourist arrivals increasing by 6.6% to 6.61 million in 2019. Key attractions include the Angkor Wat in Siem Reap, Sihanoukville, and the capital city, Phnom Penh. The surge in tourism has prompted extensive infrastructure development, including improvements to international airports, enhancing the country’s appeal to investors.
5. US Dollar Economy & No Foreign Exchange Control
Despite the Cambodian Riel being the official currency, the US dollar is widely used for major transactions, including real estate. Cambodia is one of the few countries in the world, and the only one in Southeast Asia, where the US dollar dominates, accounting for over 80% of currency in circulation. The absence of foreign exchange controls allows free movement of capital, making it easier for investors to manage their investments.
6. Freehold Foreign Property Ownership
Since 2010, Cambodia has allowed foreigners to own freehold properties, such as condominiums or apartments above the second floor, with a maximum foreign ownership quota of 70%. There are no restrictions on the amount of investment, and foreigners can freely sell their properties. However, foreigners cannot own land directly.
7. Affordable Property Prices
Compared to other Asian countries like China, Hong Kong, and Singapore, property prices in Cambodia are highly affordable. For instance, condominiums in central Phnom Penh are priced between $2,000 and $3,000 per square meter, a fraction of the cost in other major Asian cities. Although prices have risen in recent years, they remain low relative to the global average.
8. Capital Growth & Rental Yield
Cambodia’s real estate market has shown significant growth, with Phnom Penh property prices increasing by an average of 15% due to strong economic performance and favorable foreign ownership laws. Land prices in Phnom Penh have also surged since 2010. The city is popular among investors from China, Singapore, Taiwan, and Hong Kong, offering attractive rental yields of 6% to 8%.
9. Robust Development Plans
The rapid growth in tourism and foreign investments has spurred massive high-rise developments, particularly in Phnom Penh. These developments cater to the increasing demand for residential and commercial properties, further boosting the real estate market.
10. Investment Incentives
Cambodia offers numerous incentives for investors, including tax holidays, duty exemptions, and investment guarantees. These incentives, coupled with the country’s open investment policies, create a favorable environment for real estate investments.
In summary, Cambodia’s strategic location, robust economic growth, youthful population, booming tourism industry, use of the US dollar, and favorable investment policies make it an attractive destination for real estate investors. Whether you’re looking for capital growth or high rental yields, Cambodia presents a wealth of opportunities.