Cambodia Luxury Condo Boom Shows No Signs Of Slowing
Cambodia performed a remarkable turnaround from its bloody past and now sits as a jewel in Asia’s real estate market.
New York real estate, watch out. Cambodia’s Phnom Penh is hot on your heels. Now, that’s not a sentence you’ve read before. The glass, steel, and shimmery high rise boom occurring in the Big Apple is being equaled—if not bettered—in Cambodia. The Phnom phenomena has Asian, European, and American investors rushing into the former war-torn country and spending cash almost as fast as new towers touch the sky.
A loosening of foreign investment rules in 2010 saw condo developers— largely from other Asian countries—pouring in. Low taxes, low land costs, and a low cost of living have created the perfect storm for developers, investors, and buyers. Compounding the effect have been the almost non-existent anti-money laundering laws that have, according to George McLeod of PwC in Thailand, speaking on VOA News, allowed talk of “suitcases of cash” to do deals.
The faltering Chinese economy, along with an impending government clampdown, has also encouraged Chinese developers to flood into Cambodia—leaving Knight Frank to predict that the country’s soaring economy will continue to fuel both the residential and commercial real estate market throughout 2017. With it’s GDP growing at a propulsive 7.1 percent, according to a projection from Asian Development Bank, Knight Frank expects the supply of new residential apartments in the city to surge by a meteoric 641 percent. CBRE suggested that Cambodia’s condominium market would increase by more than 9,000 units between 2015 and 2018.
Clearly such an increase could result in a bubble—and not the kind that accompanies popping champagne corks.
“There are growing concerns about a potential oversupply in the near future, with many anticipating supply to quickly outpace demand,” Sophia Perez, research and consultancy manager at Knight Frank Cambodia told Property Report. “This can be attributed mainly to limited local market demand coming from high-net-worth individuals and expatriates living in Cambodia, which has forced many developers to target the overseas market.”
The buzz has recently seen U.S. firm Century 21 and international brokers Savill’s join forces with Cambodia’s Keystone Property Consultants. For Americans and other westerners, the lure of Cambodia is as a retirement haven. The country of Pol Pot’s genocide in the 1970’s and President Nixon’s carpet bombing has been on the radar as a cheap and tranquil destination to peacefully while away your golden years. Restrictions on visas for foreign retirees have been relaxed by the government, encouraging the influx.
“Opportunity often lies in that space between the public’s somewhat negative perception about a place and the much more positive reality on the ground,” Jennifer Stevens, the executive editor of International Living, a monthly magazine that caters to older people who are thinking of moving to less expensive countries, told The New York Times. The magazine reported that an American retiree could fund “a relaxed and comfortable lifestyle” in Cambodia on nothing more than a $1,000-a-month Social Security check. “You just get great value there,” said Eoin Bassett, the magazine’s editorial director.
A real estate search found the majority of listings of new luxury condos priced between $100,000-$300,000. Ten year mortgages are available to foreigners with a down payment of around 40 percent but many retirees choose to buy all cash, not wanting to deal with a mortgage.
Cambodia, from genocide to paradise. Who knew?
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