Cambodia has experienced economic growth during the last ten years as a developing nation, indicating significant potential in the real estate market, especially in Phnom Penh. Two key elements have influenced the real estate market in Phnom Penh to rise so quickly.
- First, there is a significant foreign direct investment in Cambodian real estate. Chinese investors have poured FDI into the nation due to the potential for market expansion. Chinese investors have primarily invested in both the residential and commercial structures in Phnom Penh.
- The second factor is the increase in millennials, who comprise around 74% of the population. The millennial generation is driving demand for diverse and reasonably priced housing because they have a new viewpoint on living conditions.
Together, the two forces significantly impact the real estate market, with the first element responding to new business prospects and development and the second factor boosting the demand and supply ratio.
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Advantages of Investing in Phnom Penh’s Real Estate Market
City’s Growing Economy Providing Growth Potential to Investors-
The capital city of Phnom Penh is experiencing a real estate investment boom due to aggressive expansion by Japanese and foreign businesses in Cambodia, where economic growth is still strong. Companies from abroad continue to enter the market in quest of a low-wage Cambodian labour force due to the country’s reputation for hard work.
The government is actively luring domestic and foreign businesses while expanding the number of special economic zones with advanced infrastructure. It has increased employment, and Cambodia’s young and resourceful labour force has reacted positively to the country’s strength.
By increasing national authority in this way, income rises, and consumer wants to grow, which drives up prices and land values. Cambodia is in such a positive cycle now that it has entered the growth stage. Thus, increasing the opportunities in Phnom Penh real estate market.
Vibrant Culture-
Phnom Penh’s vibrant culture attracts a lot of tourism, leading to high property demand. Cambodia’s government has increased Phnom Penh tourism, increasing demand for hotels, resorts, and Air BNBs. Investors can benefit from the boom of tourism by investing in properties and renting them to tourists.
Increased Collaboration With Banks For Mortgages-
The formation of cooperation between developers and banks to improve accessibility for regional buyers has been particularly active. However, it must be stated that most Cambodian banks have strict lending policies when it comes to financing foreign buyers. However, institutions affiliated with an international brand might be more willing to help.
In Cambodia, there are numerous multinational banks. However, if your home country bank has a presence in Cambodia, it might be a choice worth considering.
Even non-citizens and foreigners in Cambodia can create US dollar-denominated bank accounts and deposit their rent money into local banks. Additionally appealing are the high deposit interest rates offered by Cambodian banks.
Dollarised Economy
The country’s primary form of payment is the USD. The US-China trade war has affected the world economy over the past two years, and Cambodia has benefited from some of the conflict’s impacts as China has become more dependent on the country as a commercial hub. A long-term resolution may give Cambodia a platform to strengthen its export competitiveness. A depreciating US dollar will benefit foreign investors searching for cheap real estate opportunities.
Growing Population
With an average age of 25, Cambodia’s population is predicted to rise by over 20% by 2030. As the workforce expands to keep pace with economic expansion, more housing will be built in urbanised areas to accommodate employees. Approximately 16 million people now reside in Cambodia, and 1.5 million are in Phnom Penh.
Foreign buyers of real estate who want to acquire rental returns or house their staff are anticipated to boost their demand. It will benefit developers concentrating more on mid-range and cheap projects from local investors.
Conclusion
Buying a property in Phnom Penh has many advantages because of the city’s vibrant culture, which attracts many tourists and investors. Phnom Penh sees the most development in the country as it is the capital, which makes it the best place to invest in property.
As the nation’s GDP proliferates, more and more local and foreign investments are increasingly flowing into Phnom Penh’s real estate market. With time, the property rates will only take a hike giving an excellent return on your investment.
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