Strong Cambodian economy spells good news for foreign property investors

With the Khmer Rouge and genocide now a distant memory and the country one of Southeast Asia’s fastest-growing economies, it’s time to consider Cambodia’s real estate investment potential.

Given its small size and troubled history, Cambodia’s appeal as an investment hub might not be immediate, but a closer look might change your mind. Good real estate markets are generally found
in countries with robust economies, with Cambodia’s one of the strongest in the region. In 2017, it had a GDP growth of 6.9 per cent, the second fastest in Southeast Asia, and it’s expected to top that figure for 2017. It’s a rapid but sustainable curve which hasn’t faltered for a decade or more, perhaps partly due to China’s growing interest.

The country wasn’t much affected by the 1990s Asian Financial Crisis, ignored the tech bubble at the beginning of this century and pulled back fast from the 2008 financial meltdown and its following global recession. During the chaos, it still managed to show growth of over seven percent on average, confirming its comparative immunity from global economic unrest. Naturally, as with all other world countries, Cambodia isn’t touting a recession-proof economy, but the chances of its avoiding that fate are far stronger than in most of the rest of the region.

As Southeast Asia’s property prices continue to rise, prime central property at comparatively low cost is still available in Phnom Penh. While Bangkok’s central real estate averages are now $4,000 per square metre on average and still rising, Cambodia’s capital is the only Asian capital where traditional-style real estate in its cosmopolitan heart can be had for under $1,000 per square metre. The city’s colonial-style shophouse apartments were solidly built under French rule, are still in good shape and cost around 25 per cent of the equivalent price of a condo in a new development.

For foreign property investors as well as would-be expats looking for a total change of scenery, rental yields on traditional properties average around seven per cent or more and appreciation prospects are strong. However, as in the rest of the region, Chinese investors are lurking on Cambodia’s sidelines, ready to move after the 2018 elections and their predictable outcome. The overall trend is now becoming clear, with population numbers rising fast, the economy growing even faster and tourism set for a boom as Thailand’s junta with its ever-tightening anti-foreigner laws staggers on.