Upside in the horizon for Cambodian real estate Q1 Is now a good time for foreigners to invest in property in Cambodia? Cambodia is a developing country that’s politically stable with a government focused on building up its agriculture, construction, banking and real estate sectors. With a high population growth, the demand is expected to be strong for housing in the coming years. To attract foreign investors, the government has allowed foreign ownership with no currency restrictions, low taxes, freehold tenure and a relatively easy pathway to residency or even citizenship. The potential upside is huge meaning high investment returns in a largely dollar economy. Best of all, prices of land and houses are still cheaper than many other ASEAN countries.

CAMBODIAN PROPERTY IS A GEM IN THE ROUGH

Upside in the horizon for Cambodian real estate

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Q1 Is now a good time for foreigners to invest in property in Cambodia?

Cambodia is a developing country that’s politically stable with a government focused on building up its agriculture, construction, banking and real estate sectors. With a high population growth, the demand is expected to be strong for housing in the coming years. To attract foreign investors, the government has allowed foreign ownership with no currency restrictions, low taxes, freehold tenure and a relatively easy pathway to residency or even citizenship. The potential upside is huge meaning high investment returns in a largely dollar economy. Best of all, prices of land and houses are still cheaper than many other ASEAN countries.

Q2What types of property can the foreigner invest in?

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The foreigner can buy land to build apartments, condominiums, hotels, houses or villas in the city centre or buy land to build villas, houses and apartments outside the city centre. In the provinces, they can rent concession land from the government for plantation and other agricultural pursuits as well as developments while for the many islands in Cambodia, the foreigner can rent concession island from the government to develop resorts.

Q3 What is the policy pertaining to foreign ownership of property?

Foreigners can buy an apartment or condominium starting from the first floor upwards. The ground floor or land cannot be purchased unless they set up a company with 51% Cambodian share. The property can be bought fully in their name on freehold tenure. Also, our government policy is not so strict for investors who want to become residents or citizens.

Q4 What are the expected returns in terms of rental and capital appreciation?

You can expect high rental yield and high capital appreciation. Property prices can generally increase between 20% and 25% due to the strong economic growth. In some cases, prices can even double in a short amount of time. Prices can even go crazy following an announcement by the government that they will build a highway, bridge or stadium in the vicinity. For example, a USD100K piece of land can fetch up to USD500K – USD700K following such an announcement.

This growth acceleration is expected to go on for the foreseeable future due to our stable political climate and good population growth. Cambodia’s population grew at an annual rate of 1.8% for 2013.

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c3Roeung Sophon Rith is owner of Roeung Rith Consultancy with clients ranging from government ministers to business enterprises
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