The real estate market in Cambodia, like many countries worldwide, was hit hard by the COVID-19 pandemic. Despite all the uncertainties that came with the pandemic, according to the Phnom Penh Post, the Minister of Finance, Aun Pornmoniroth, there has been a spike in investment activity in areas where prices were still low.
He expressed that he has hope for the future of real estate in Cambodia due to its low prices compared to its surrounding countries at the 23rd ASEAN Valuers Association Congress held in Cambodia in November 2021.
Investing In Real Estate
Investing in real estate is a great way to make money, but it needs to be a well-calculated decision and requires a lot of money that you don’t immediately need, as you only get returns from your investment after a few years. Sometimes the real estate market may be unpredictable as it had been in the last two years due to the pandemic causing many people to suffer considerable losses.
Before making any final purchases, it is always best to consult with experienced professionals and experts in real estate matters.
Here are some of the reasons why Cambodia is a great choice to move to post-pandemic:
The Annual Global Retirement Index ranked Cambodia as the 3rd cheapest place to live in 2022. Its revived and thriving economy, a bustling capital with all the trendiest markets and improving medical facilities. While Phnom Penh is the most expensive city to live in in the country, it is still comparatively cheaper than most cities in the world, depending on the scale of the apartment.
The cost of living is decent, ranging from $1000-$1500 a month depending on the size of your family, making it an ideal destination for those looking to relocate.
Local Investors Are On the Rise
Due to the closing of borders during the pandemic, real estate developers had to adjust their marketing strategies to attract local buyers, including reducing prices. Before the pandemic, there was a great demand for condos for investment purposes among foreign investors. After the pandemic, there was a shift from ex-pat investors to local ones. Due to this reason, more local investors have started taking an interest in real estate within Cambodia.
Growing Potential in Phnom Penh Suburbs
Phnom Penh, the capital of Cambodia and one of its most populated cities, is expanding its radius by 100 km by the year 2035. Expanding urban colonies also means that Cambodian real estate is now more focused on catering to its local population by adding amenities to residential developments and planning better communities.
Ventures such as malls, educational institutions, and serviced-based establishments are on the rise and are expected to become a common feature of Phnom Penh’s real estate.
High Demand for Homes
Since the pandemic, there has been a rise in the demand for residential homes. Since many ex-pats and locals had been living in Phnom Penh for work, there was a high demand for residential units even before the pandemic. The pandemic brought a shift in people’s minds about how they viewed their homes and were more focused on improving their and their family’s lifestyles. This was mostly because many were spending more time at home due to working remotely.
With homes becoming a centre again for modern-day living and the hybrid work from home model still in place, residential property demand will continue to rise, and buyers will work towards stretching their location parameters. There is great appeal in the residential sector, and many millennials are on the lookout for homes to own.
Demand for Better Quality Units
Due to the drop in foreign investors, local residential buyers will not be launching newer units to encourage the consumption of older oversupplied units. New developers will now have the opportunity to shift their focus to developing more innovative and higher quality units due to an oversupply of units in the mid-range section.
According to a CBRE report yearly forecast report in 2021, around four condo projects of over 1000 units each and 62 boreys of over 20,000 units were launched. There are another 50,000 more borey units and about 13,000 new condo units expected in the year 2022.
With vaccination drives being carried out at maximum capacity, the economy recovering, and businesses resuming to operate full time, real estate developers are talking about raising prices in the next 12 months.
Their aim is to bring the prices back up to pre-pandemic rates. They are also hopeful that with the recent introduction of the concept of condominiums and their popularity and ease of purchase among foreign investors, the market will rise towards becoming more stable and less risky.
Why Is The Year 2022 The Ideal Time For Buying Property In Cambodia?
While the country had aimed for a complete relaunch by the year 2025, there has already been a rapid progression in tourism and other major economic sectors, causing developers and investors, both local and foreign, to be optimistic about the future of real estate in Cambodia.
Due to rising demands, developers are gradually moving towards raising prices and matching to pre-covid prices.
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