If you have decided to settle in Cambodia buying property is not only a logical step, but potentially a sound financial investment. What though are the rules for foreigners buying property in Cambodia?
Can foreigners buy property in Cambodia – what are the rules?
Can foreigners buy property in Cambodia? In short, yes they can, although there are restrictions.
Foreign nationals, as well as foreign-owned corporate entities, may buy properties, such as condominiums, apartments, or offices, so long as they are not located on the ground floor of a building.
This is similar to the laws of other countries within the region, such as the Philippines which has a thriving (non-ground floor) condominium market.
Depending on the development foreigners may also be eligible for mortgaging and, or financing, with the terms usually being dependent on the development.
Can foreigners own land in Cambodia?
Only Cambodian nationals may own land within the Kingdom. As the law currently stands both foreign nationals and foreign corporate entities are not entitled to own land.
This can be circumvented by using a nominee system, or by leasing, land for a 15-50 year period, but foreigners cannot own land within Cambodia.
To read our report on buying land as a foreigner in Cambodia click here.
Should you buy property in Cambodia in 2022?
Generally speaking prices in Cambodia dropped during the worst stages of the pandemic, and while since bouncing back somewhat are not at their peak yet according to several realtors.
Prices have also been affected by the lack of Chinese visitors and investors in the sector, with Chinese foreign direct investment (FDI) making up 43 percent of total investment in Cambodia in 2020. With Chinese nationals now under a current defacto travel ban, this has again created real-estate investment opportunities throughout Cambodia and particularly in Sihanoukville.
To read more about Cambodia’s 2022 economic outlook click here.
The economy of Cambodia has also improved significantly since GDP dropped by 3.1 percent in 2020. In 2021 GDP growth reached 2.2 percent, with it expected to rise by as much as 5.6 percent in 2022. These trends suggest 2022 as being an opportunistic time for real-estate investors within the Kingdom.
Where are the best places for foreigners to buy properties in Cambodia?
The prohibition on owning ground floor land, as well as available services means that buy and large ex-pats tend to buy property in the following areas;
• Phnom Penh
• Siem Reap
To a lesser extent, Battambang and Koh Kong (particularly for the Chinese market) could also be included on these lists.
Cambodia has also proved extremely attractive to the retiree market and was once again voted not only of the best places to retire globally but also the best destination in Asia.
As previously reported by Cambodia Investment Review this was for a number of factors, with the price of the property being key among them.
This has also led to a slew of developers specifically targeting the retiree market, particularly in Siem Reap.
Buying land as part of a consortium in Cambodia
Another new trend in foreign property and land ownership within the Kingdom has been through the utilization of the consortium model. Here investors can purchase a certain amount of shares in a property project as tenants-in-common.
These consortiums tend to be based more around investors than those wishing to live in or utilize the purchased land.
Lux Realty has been particularly active in this market, with CEO Crispin Kirby telling Cambodia Investment Review: “The consortium model means that investors are what is termed tenants in common. This has allowed us to not only offer smaller affordable investment packages, but we have been able to invest in places people would not necessarily want to live in.
Generally speaking returns on these investments are just as high, if not higher than in more fashionable places”.
This article is part of Cambodia Investment Review’s Explainer series. A simple guide to everything you need to know about business and investment in Cambodia.