Cambodia’s rise is no longer under the radar as everyone is aware of its accomplishment, hence the nickname “The New Tiger Economy”. Their construction and real estate sector plays a huge role in the overall development of the country. And as it happens to be, Phnom Penh is in the middle of it all.
The Phnom Penh real estate market has been growing continuously for several years. Specific segments grew more than others, but the growth was never questioned. What follows is a small, but concise guide on the real estate market in Phnom Penh from the perspective of an investor.
Therefore, if you are considering investing in real estate in Phnom Penh, or maybe just curious about it, here is what you can expect.
Phnom Penh Basic Facts
Phnom Penh is the capital of Cambodia and, at the same time, its biggest city. It is the center of all things economic, cultural, sports, and so on. The city is spread over an area covering 232 square meters. As of 2019, Phnom Penh’s population is 2,014,015 and has a 3.15% annual growth rate. Analysts predict that percentage to last in the next ten years.
Growing Middle Class
The strong economic growth has led to the creation of a middle class with excellent buying power. Phnom Penh’s emerging middle class is already making a splash in the housing segment of the real estate market. As a result, 2019 was a great year for mid-price housing projects.
Phnom Penh is Favorite with Foreign Investors
Phnom Penn is the default destination for all foreign investors. They first look at what’s available within the city, then at the rest of the country. Chinese investments are highest, then follow investments from the other neighboring rich countries, Australia, and the USA.
Phnom Penh Has a Massive Community of Expatriates
Official statistics say that around 150,000 expatriates are living in Cambodia, and most of them live in Phnom Penh. Furthermore, as the country’s economy expands, more expatriates are expected to arrive for work and living in Phnom Penh. That also creates a strong demand for modern houses and apartments.
Excellent GDP Growth
The current projections suggest a 6.8% growth or more. By today’s standards, that’s remarkable growth. Historically looking, the real estate market always grew when the GDP grew, and that’s a rock-solid fact. Therefore, it is fair to expect that to be replicated in 2020 as well.
Affordable Housing set for an Expansion in 2020
The affordable housing segment of the real estate market is set for a surge in 2020. The last two quarters of 2019 were quite impressive, and a lot is expected in 2020 as well. The demand is driven by folks moving from rural parts of the country in Phnom Penh in search of a better living. That’s a direct result of Phnom Penh’s continuous growth for the additional workforce.
All data and information point to the steady growth of Phnom Penh’s real estate market. The only unclear thing is which segments will outperform others and for how much. The affordable housing market will do well, but how well is yet to be seen.