The Rapid Growth of Phnom Penh Real Estate Market

05 September 2022 | Posted in Content Hub, News | Tagged: Rapid Growth
The Rapid Growth of Phnom Penh Real Estate Market

The Rapid Growth of Phnom Penh Real Estate Market

As a developing country, Cambodia’s economic growth within a decade shows promising opportunities for future development, especially in the real estate sector. The real estate sector has continued to grow even during the COVID-19 pandemic and is expected to have a bounce rate of 3% in 2022 (MEF, 2022). What does the growth of real estate mean for large-scale and personal investment?

How did real estate in Cambodia grow?

The annual report from the Ministry of Land Management shows that in 2021 there are 4,303 approved real estate projects. Housings in Cambodia are now available in the price range below $100,000 to over $4 million depending on the house type and project. It should be noted that the real estate market has been a crucial contributor to Cambodia’s GDP growth according to the World Bank.

What causes the real estate market to grow?

The influences behind the rapid growth of the Phnom Penh real estate market fall under two main factors. Firstly, there is a large amount of foreign direct investment in real estate in Cambodia. Over the past few years, Chinese investors have been pouring FDI into the country because of the market development opportunities. Because of the funding provided by Chinese investors, Phnom Penh is now buzzing with residential and commercial buildings.

The second reason is none other than the increase of millennials that made up approximately 74% of the population. With a new perspective on living quality and environments, the millennials increase the demand for affordable and diverse housing. The two factors combined greatly influence the surge of real estate growth with one answering to new business opportunities and development while the second one increases the supply and demand factor.

Why should you invest in real estate in Phnom Penh?

If knowing the rapid growth of real estate in Phnom Penh is not enough to convince you to start investing, then here are a few more reasons:

  1. Phnom Penh is a strategic location that is great for investment. In addition to having Vietnam and Thailand as neighboring countries, Cambodia also has close relations with China and India. This will in turn result in many business prospects and activities in the capital city, Phnom Penh.
  2. More and more investments both domestic and international are gradually streaming to Phnom Penh as the country’s GDP continues to experience rapid growth and offers an abundance of market opportunities for development.
  3. Real estate investment in Phnom Penh is made accessible to many groups of people and with more convenience than in other countries as well, ranging from currency use, eligibility, tax, and law regulations.
  4. The speedy increase in tourism, entrepreneurship,  and transportation facilities will also create an increase in demand for all types of real estate in Phnom Penh.

What is the kind of Real Estate you can invest in?

The growth in the real estate market meant a variety of properties you can invest in. With both existing and new development real estate projects in Phnom Penh, you should carefully consider which investment will be most beneficial to your goals. Here is an overview of the current real estate market in Phnom Penh you can consider:

  • Residential real estate:

Investments in residential real estate such as condominiums, apartments, villas, etc are the current trend. With around 81 residential development projects in 2021, more and more residential real estate means more profit on the return on investment for both short and long-term benefits.

  • Commercial real estate:

If you are wanting to explore or expand your business, investing in commercial real estate is also a good choice. With commercial real estate, you can increase your passive income through the rental of the building or gain capital too. There is also an increase in commercial spaces for rental as there are more and more startup companies in Cambodia.

Phnom Penh’s real estate market is a very potential market for business and personal investment. If you are wanting to make an investment in real estate, now is the right time to do so! For professional help on real estate investment, seek CBRE for consultations.

Click here to read about: How to Invest in Real Estate in Cambodia?