8 Reasons Why People Invest in Cambodia
- 1Strong GDP Growth
- 2Political System
- 3Strategic Location
- 4Rising Land Prices
- 5Foreigners can own Freehold Property
- 6U.S Dollar Economy
- 7Young Population
- 8Last Frontier
Strong GDP Growth In Cambodia
Over the two decades before COVID-19 struck in 2020, Cambodia blossomed economically. Having reached lower middle-income status in 2015, it set its sights on attaining upper middle-income status by 2030. Cambodia’s economy grew at an average annual rate of 7.7 percent between 1998 and 2019, making it one of the fastest- growing economies in the world. (Source: WorldBank)
Cambodia’s economy is forecast to grow 5.3% in 2022 to 6.5% in 2023.
Latest update by Economist Intelligence (April 2023) that Cambodia’s GDP in 2022 was estimated to be 5.1%
Key Drivers of Cambodia GDP Growth
The key drivers of the economic growth and GDP include Manufacturing, Agriculture, Tourism and many construction of buildings to make Cambodia a modern city like all other nearby countries. Excavation works are undergoing for extraction of oil and gold. The country expects to grow richer in the years to come and the developments within the heart of its capital will thrive along with it.
Political Party in Cambodia
Cambodia’s political system has been dominated by Prime Minister Hun Sen and the Cambodian People’s Party (CPP) for more than three decades. The stability of the political party mean masterplan can be carried out and vision can be realised. Today, we can witness the plan for the city being constructed everywhere. In a short few years, you can see the change in the landscape from a low rise city to more sky scrapers and beautiful buildings everywhere. Major roads and plan for large international airport and railways are on the way too. Investors from around the world, want to be the first mover to dominate the market before it become the leading economy around asia.
1999 - Joined ASEAN
2004 – Joined World Trade Organization
(WTO) (least developed country to do so) Open to international trade
Strategic Location
Cambodia is sandwiched between Thailand and Vietnam; and midway between the 2 world’s largest and fastest growing economies, China and India; It is also part of the Belt & Road Initiative.
Rising Land Prices in Cambodia
The evaluation found the average asking price of land in Phnom Penh in the fourth quarter 2013 was US$1,140 per square meter (sqm). The minimum price was about US$10 per sqm while the maximum reached US$5,900 per sqm.
The sample land surveyed was largely residential (64 percent) while the remainder comprised commercial, industrial or developing areas. Most of the surveyed land was occupied with only 38 percent being vacant. The ten areas with the highest land prices were located in industrial and residential areas, had good infrastructure development and were close to markets or on busy streets. Prices in these areas - Boeung Keng Kang, Phsar Tmey, Phsar Daeum Kor, Chaktomouk, Chey Chumneah, Prampir Makara, Tumnum Tuek, Ou Russey, Oulampik, and Russey Keo - ranged from US$4,500 to almost US$6,000 per sqm.
In 2013 average land price in BKK1 was US$3,300 psm
The Cambodia Daily
In 2013 average land price in BKK1 was US$3,300 psm
In a 2023 survey, land price starts from US$4,500 psm
Freehold Property Ownership by Foreigners
Foreigners are given permits to own or lease properties that are located off the ground. Foreigners can 100% lease or own a freehold strata titled property in Cambodia that are located off the ground. Foreigners can only own the 2nd level or higher to a maximum of 70% of any one apartment building, provided that the building has obtained a ‘strata title’, which generally applies to new condominiums buildings.
U.S. Dollar Economy
U.S. Dollar is the de facto currency that is most widely used, even though the official currency is the Cambodian Riel. The National Bank of Cambodia says 80% of all transactions in the country are still done using US dollars (including such as business dealings, investments and the selling or buying properties). The Riel is also pegged to the dollar, which limits inflation and foreign exchange risks.
Young Population in Cambodia
Majority of the population in Cambodia are young and working age population. The elderly only less than 5% of the entire country's population.
The Last Frontier Market
Owning property is still very affordable in Cambodia. An average Cambodia property price of an high-end condominium in the city centre of Phnom Penh transacts at around US$3,250 per square meter (US$301 psf), versus a property in Singapore city centre which commands at an average of US$21,528 per square meter (US$2,000 psf). Even though Cambodia property price have gone up in the last few years, these figures are still very low when compared to the global average.
Cambodia’s capital city Phnom Penh is home to around 150,000 expats nearly all of which live in rental accommodation.
