Due to the pandemic, all sectors have been hit hard, and real estate is one of them. In Cambodia, the real estate sector was poorly affected at the beginning of the COVID-19 pandemic in 2020. In 2021, despite positive expectations, the market became worse due to lockdowns and new variants. However, after the country’s reopening in November, the market has progressed.
As the restrictions of being quarantined for 14 days on arrival from Cambodia have been removed from almost all the nations, the doors for foreign investment in Cambodia are finally open.
The demand for residential properties has increased significantly in Phnom Penh because of plenty of ex-pat workers and locals from areas living in the city for work. A sidestep in the real estate sector in Cambodia has made the news worldwide.
Let us go through the following types of properties that made news and are now thriving.
1.Condo sector has revived with the return of foreign investor
Pandemic most severely impacted the sale of Condos in both 2020 and 2021. The market went down as it is mainly dependent on foreign investors. Foreigners that started the projects in Cambodia suspended them, and even some local developers also paused the projects due to a lack of money caused by no sales.
This sector has revived with the return of foreign investors. And it has also gained popularity in the local market because of reconfiguring the location, size, and price. The condos are being developed in the city center for Khmer people, with decent room sizes and affordable prices.
2. There will be high demand for low to mid-range borey
There will be increased demand for low to mid-range borey types in 2022 and at least for the next 5-10 years. Borey’s priced between US$50,000 and US$100,000 are in high demand.
A large ratio of the Cambodian population has low and middle earnings. Therefore, they are most likely to consider residential projects with unit prices below $100,000. Given the more accessible access to bank loans, the market for borey will continue to grow.
3. In the upcoming years, the trend of buying Dey Lo will continue
In the upcoming years, buying Dey Lo will continue, especially among young people with low earnings who cannot afford a house. It is the only way for them to invest in a property.
However, there is a possibility that some of these may collapse in two to three years if developers don’t change and upgrade their development methods.
There are some Dey Lo developments without proper infrastructure, for example, no roads, no drainage, and no utilities. Some Dey Lo’s are too small and located too far from the city or urban areas. If the developers keep doing so, it will not be feasible for anybody to invest in the plot in the next two to three years.
In contrast, if developers build proper infrastructures with precise planning and decent-sized plots of land, this business will endure for many years.
4. Building factories or warehouses for rent has been attaining popularity in recent years
Building factories or warehouses for rent has been attaining popularity in recent years. However, in 2022 and beyond, locations and land size will determine whether or not this type of business is profitable.
It’s better not to invest in a warehouse or factory leasing business for those who only own 1 to 2 hectares of land. Profitability in the business is only possible when one owns at least more than 10 hectares of land.
Renting itself won’t make you much money. It is common for people to profit from this business by selling the nearby land.
5. Vacation homes for sale have become increasingly popular
Vacation homes for sale have become increasingly popular, particularly at tourist attractions. However, an oversupply of this type of property can pose financial risks to developers because of the overall economic conditions, low household incomes, and low demand.
Most Cambodians cannot afford a vacation home as they cannot afford a basic house. The largest population, the young to middle-aged generation, will keep their money to buy a primary residence and car.
The clients who need a vacation home exist, but it is minimal, primarily for wealthy people over 50 years old. Thus, vacation homes need more time to grow, at least 5 to 10 years.
Good Time To Invest In Real Estate
The market for real estate is growing, and it will only get better in upcoming years. So it is a great time to invest in real estate, be it for personal use or investment purposes. As the Cambodian government is offering various schemes to foreign companies to attract and set up a business, it is also upscaling the property market.
So if you want to buy or rent a property in Phnom Penh or Siem Reap, then IPS Cambodia is the best partner. Cambodia’s premier real estate company provides up-to-date information and advice on real estate.
The Swerve of Cambodia’s real estate market has been surprising for the country and worldwide. According to the news headlines, it is the best time to invest in the property, whether personal or investment. IPS Cambodia real estate agent in Cambodia could help you get the best properties at reasonable prices.