How the market is panning out

Cambodia has seen rapid growth and the residential market is starting to shift.  

The country received a total of USD 8.5 billion in foreign direct investment in 2016. This was for the construction sector alone. Subsequently the Phnom Penh housing stock has risen. With this rapid expansion within the property world the question often raised is, “Is there enough demand for all this property?”

Before answering this, lets take a look at the country as a whole. Cambodia has attractive conditions for investment. Its strategic location and vast manufacturing potential has lured in investors keen to profit.

Subsequently salaries in Phnom Penh continue to rise at a fast rate. Industries in the Cambodian capital have been flourishing and last year the World Bank classed the country as a lower-middle income country. The World Bank stated that the, “Robust economic growth averaging 7.6 percent per year in the past two decades has transformed Cambodia from one of the world’s poorest countries to a lower middle-income country today”.

The government are aiming for the country to become a high income status by 2050. Ambitious aims but nevertheless while we wait to see if this happens the country’s middle class and their spending potential should not be underestimated.

Increased supply.

The booming economy has had a knock-on effect to the housing market. By the end of 2016 there was over one hundred thousand new units added to supply. Just over another 28,000 are expected by the close of 2017. These are big numbers not to be sniffed at.

The property market has been kick started thanks to favourable conditions that have enticed investors. Finance has become more readily available with some projects not even requiring a deposit. This has helped to move the market as more lower-income earners are benefitting from improved conditions, alongside the fact that first time buyers are being helped with the option of purchasing completed units.

Whilst the market over the last few years has been dominated by developers, the coming years are expected to see a more equal balance of supply. This will level out the supply and demand mechanism plus the market will become more transparent. Both factors that will be to the benefit of investors.

Should you be looking to advantage from Cambodia’s flourishing housing market, have a look at Dot Property’s comprehensive listings online here.