Your dream property in Cambodia!

Why and how to buy property in Cambodia?

Summary from a video of the same title in which we discuss why it is worth buying real estate in Cambodia and how to do it…

Real Estate Market in Cambodia: Boom, Decline, and Recovery?

The real estate market in Cambodia has experienced dynamic changes in recent years. Driven by the influx of local and foreign capital, mainly from China, it has seen a significant investment boom in the sector for about 10 years. This has resulted in the construction of numerous new condominiums, office buildings, and shopping centers. Initially, the limited supply of real estate led to a sharp rise in prices.

However, in 2020, the market collapsed dramatically due to two main factors: the COVID-19 pandemic and an oversupply of housing. Compared to the peak in 2019, property prices dropped by 30-50%.

Currently, the real estate market in Cambodia is slowly regaining stability. Prices remain low compared to pre-pandemic levels. Experts predict that in the next 2-3 years, prices will stabilize and then begin to gradually increase.

Why is it worth buying real estate in Cambodia?

There are several reasons why buying real estate in Cambodia can be a good investment:

  • Low prices: Property prices in Cambodia are still significantly lower than in Western Europe or the United States. This means that for the same amount, you can buy a larger and higher-standard property here.
  • Diverse common areas: Residential buildings (Condos) in Cambodia have very diverse common areas, which are usually not found in residential buildings in Europe. Depending on the standard, these can include:
    • Swimming pools
    • Fitness centers
    • Rooftop terraces and gardens
    • Rooftop bars
    • Children’s playgrounds
    • Tennis, badminton, and basketball courts
    • Lounges, conference rooms, and entertainment zones
    • Green areas
  • Young and immature market: The real estate market in Cambodia is still young and immature, which may have growth potential in the long term.
  • Fast-growing economy: Cambodia’s economy is growing at a fairly rapid pace, which may create demand for real estate in the long term.

Things to consider before buying real estate in Cambodia:

  • Market imperfections: The Cambodian real estate market has some imperfections, such as ownership issues and the risk of fraud. Therefore, it is crucial to conduct thorough research on the documentation and seek the help of a lawyer before buying a property.
  • Lack of transparency: The market is not as transparent as in developed countries. Obtaining reliable information about property prices and comparing offers from different developers can be challenging.
  • Difficult and time-consuming sales: Currently, selling real estate in Cambodia can be difficult and time-consuming. This should be kept in mind if you plan to quickly dispose of the property.

Property ownership for foreigners in Cambodia

According to current law, foreigners in Cambodia cannot directly own land and, therefore, cannot purchase so-called “landed properties” such as houses. However, it is possible to buy apartments and office spaces in co-owned buildings based on a special hard ownership title called “Strata Title.” These titles provide foreigners with a secure and legal way to own property. It is worth noting that there are also some legal solutions that allow foreigners to purchase landed properties. More information on this topic can be found in the article “What types of properties can foreigners buy in Cambodia?“.

Additional Information:

  • Popular places outside Phnom Penh: Siem Reap, Kampot, and Sihanoukville.
  • Rental costs: Renting property in Siem Reap can be significantly cheaper than in Phnom Penh.
  • Availability of Strata titles: Strata-titled properties are mainly available in Phnom Penh but are becoming more common in Siem Reap and Sihanoukville.

Types of properties

  • Condominium: Apartments in a residential building that can be owned. They usually have amenities such as pools, gyms, and security. Available in various price ranges from affordable to luxury.
  • Service apartment: Apartments rented for short or long periods. Fully furnished and equipped with necessary appliances. Often have common amenities for the entire building.
  • Traditional Khmer house: Houses built on stilts typical of rural areas of Cambodia.
  • Shop house: Narrow two-story buildings where the ground floor is usually a shop or restaurant, and the upper floors are residential. Popular in cities.
  • Villa: Large luxury houses often located in gated communities.

Important information:

  • Foreigners cannot own land in Cambodia: However, they can acquire ownership rights to condominiums on the first floor or higher (up to 70% in a given building).
  • Traditional Khmer apartments and houses: These can be challenging to acquire due to the complex legal situation.
  • Property prices: Prices in Cambodia depend on location, type of property, and finish standard.
  • Consultation with a lawyer and real estate agent: It is essential to consult with a lawyer and real estate agent before purchasing property in Cambodia.

Phnom Penh Districts

Main districts in Phnom Penh that are attractive to foreigners:

  • BKK (123): Central residential-commercial district with trendy cafes, restaurants, and boutiques. It is a hub for expatriates and locals.
  • Doun Penh (Riverside): The heart of Phnom Penh with historical landmarks, bustling markets, and nightlife along the Mekong River.
  • Russian Market: Known for its lively market (Psar Toul Tom Poung) and nearby residential streets. It is a vibrant district where Khmer and foreign influences mix.
  • Tonle Bassac: Exclusive area known for luxury apartments and high-class restaurants. A prime location for expatriates and wealthy residents.
  • Chroy Changvar: Located across the river from the city center, offering riverside living and a mix of modern apartments and traditional Khmer houses. Known for its tranquility.
  • Chak Angre Leu: Located along the Bassac River with many new condominiums on the road to the new airport.
  • Tuol Kouk: A mix of residential and commercial spaces, including markets, schools, and offices. It is a diverse district with various housing options and convenient amenities.
  • Sen Sok: Rapidly developing district with new residential projects, shopping centers, and entertainment venues. Popular among families and young professionals seeking a modern lifestyle.
  • Chbar Ampov: Emerging district with new investments, including residential projects and shopping centers. Increasingly popular among families and young professionals.
  • Russei Keo: A diverse district with industrial and residential areas, including factories, markets, and affordable housing.

Administrative Map of Phnom Penh is available here

Condo Market Segments

  • High-End (Luxury): These condominiums are located in prestigious locations and offer the highest quality common areas and premium services. Often situated in central districts like BKK and Tonle Bassac, leading to higher prices due to proximity to business districts and popular attractions.
  • Mid (Middle-Class): This segment has significantly developed and now dominates the market. Mid-range condominiums provide a balance between quality and price, making them suitable for a wider range of buyers. They offer good common areas and are often located in easily accessible locations.
  • Affordable: The affordable segment is usually targeted at lower-income buyers, offering basic common areas and functional living spaces.

Other Remarks:

  • Property prices in Phnom Penh: Prices are significantly lower than in Polish cities (e.g., Wrocław, Kraków, Warsaw) by up to 70%.
  • Bigger and more luxurious apartments: For the same or even much lower money, you can buy a much larger and more luxurious apartment in Phnom Penh.
  • Districts and specifications: Before purchasing property in Phnom Penh, it is essential to thoroughly analyze the different districts and their specifications.
  • Building quality and finish standard: Pay attention to the quality of the building and the finish standard.
  • Property location and surroundings: It is also important to check the location of the property and its surroundings.

Example Offers

Properties

Types of Property Titles in Cambodia

Hard Title

  • The most secure form of property ownership in Cambodia, providing a nationally recognized certificate issued by the Ministry of Land Management and the Cadastral Office.
  • Can be issued for various types of properties, including residential, commercial, and agricultural. Available to Cambodian citizens.
  • Strata Title is a specialized form of Hard Title, allowing ownership of individual units within a building (such as condominiums and office buildings) to both Cambodian citizens and foreigners.

Soft Title

  • Soft titles are only registered at the local level, either at the council or district level.
  • The prevalence of soft titles stems from historical reasons. During the civil war from 1975 to 1979, all Cambodian land ownership records were destroyed, making it impossible to provide definitive proof of property ownership post-war.
  • Most commonly applied to land, houses, apartments, and other types of property, provided the property does not require a strata title, which is specific to units within co-owned buildings like condominiums.
  • Soft titles in Cambodia are prone to legal disputes and can be invalidated by the government if the land is needed for public projects such as roads.

Strata Title

  • A form of property ownership recognized by the Ministry of Land Management, Urban Planning, and Construction in Cambodia. A type of hard title that applies to individual units within co-owned buildings such as apartments or condominiums.
  • Full ownership: Strata titles grant foreigners the right to full ownership of their residential units.
  • Common areas: Owners share the maintenance and use of common facilities (e.g., pools, gyms).
  • Applicable to buildings constructed from 2010 onwards.
  • Foreigners can own up to 70% of the total floor area above the ground floor within a building.
  • Properties within 30 km of the national borders are also excluded from foreign ownership.

More about Strata Title in the article: “Strata Title”

SPA Agreement Registered with the Condominium Management

  • An alternative method of purchasing property—some buyers register a purchase agreement with the developer instead of transferring the property to their name.
  • Not a legal title of ownership.
  • The purchase agreement (SPA) is registered only with the condominium management, usually indicating that the buyer has made an agreement with the developer or the condominium management company. This type of registration is part of the internal documentation process of the condominium management and is not equivalent to a formal title recognized by the Cambodian government.
  • This method is risky but can be useful for quick sales.
  • The main motivation for using this method is to avoid the 4% transfer tax.

Costs of Maintaining an Apartment in Cambodia

To facilitate the estimation of maintenance costs for an apartment in Phnom Penh, here is a breakdown for a typical 60-square-meter unit:

  • Management Fees: Monthly fees include security, pool maintenance, elevator repairs, and lighting. In this case, the rate is $1 per square meter, totaling $60 per month (approximately 240 PLN).
  • Utilities: The cost of electricity in Cambodian condominiums is about $0.25-0.27 per kilowatt. The average electricity consumption for a two-person household in a 60-square-meter apartment is estimated at around 200 kWh per month. The cost of water depends on usage, but combined with electricity, utility bills can be estimated at around $50 per month (approximately 200 PLN).
  • Total Cost: Considering management fees and utilities, the total monthly cost of maintaining a 60-square-meter apartment in Phnom Penh is about $100-130 (400-520 PLN).
  • Property Tax: This tax applies only to properties valued above $25,000. The tax rate is 0.1% of the property value calculated according to the base table of the Ministry, minus $25,000 and multiplied by 80%. For a 60-square-meter apartment, the property tax would be around $15 annually (approximately 60 PLN).
  • Additional Notes: The maintenance costs of an apartment in Cambodia are significantly lower compared to Poland. The above estimates are indicative and may vary depending on the location, standard of the property, and lifestyle. Other potential costs such as home insurance, internet, and cable TV should also be considered.

Gross/Net Area

In Cambodia, developers often include common elements such as balconies, corridors, stairs, and pools in the apartment’s square footage, which inflates the actual size of the unit. This is known as the gross area. In Poland, the apartment’s square footage is calculated based on the usable area only. Before purchasing property in Cambodia, it is advisable to inquire about the net area to avoid misunderstandings. This way of calculating the apartment’s square footage is typical for Asia, in contrast to Western countries. It is crucial to understand the method of calculating the apartment’s size, which allows for comparing offers from different sources.

Differences in the Operation of Housing Communities in Cambodia and Poland

  • In Cambodia, there is no formal concept of a housing community as in Poland.
  • The management of residential buildings is less transparent and efficient than in Poland.
  • Regulations pertain to the management of co-owned property from 2009 (Sub-decree on the management and use of co-owned buildings).
  • Buildings are managed by developers or companies associated with them.
  • Some management companies may not provide clear and detailed financial reports regarding collected fees and their use for building maintenance and improvements.

Property Purchase Options:

Pre-Sale

  • You buy an apartment directly from the developer before it is built.
  • Lower initial cost.
  • Longer waiting time to move in; risk of project delays, cancellation, or even bankruptcy.
  • It is important to verify the project and the developer (due diligence).

New Apartments from the Developer

  • Purchase an apartment directly from the developer after construction is completed.
  • Potentially higher price as in pre-sale.
  • The ability to choose a ‘real tangible’ apartment.
  • Financing options offered by the developer.
  • It is important to verify the developer’s credibility.
  • Prices may be higher than in the secondary market.

Buying an Apartment from the Secondary Market

  • Purchase an apartment from a person who already owns it.
  • Check the condition of the apartment.
  • Advantages: Wide selection of options and locations, possibility of price negotiation.
  • Currently, many properties are sold at 30-50% lower prices than the purchase price from the developer.

Additional Advice:

  • Conduct thorough research before purchasing property.
  • Verify the developer’s credibility.
  • Carefully read the purchase agreement.
  • Consider seeking the help of a lawyer or real estate agent.

How to Buy Property in Cambodia

  • The real estate market in Cambodia is neither efficient nor transparent.
  • Market prices are difficult to determine due to the lack of reliable statistical data.
  • Transaction prices can be significantly lower than asking prices.

Tips for Buyers:

  • Clearly define your needs and expectations (number of rooms, location, floor, view, etc.).
  • Choose 1-2 projects that interest you.
  • Contact a real estate agent to access off-market offers (unpublished).
  • Be prepared to negotiate the price.

Property Purchase Process in Cambodia

The property purchase process in Cambodia can be divided into several stages:

  • Payment of Deposit: Initially, a deposit is paid, usually amounting to a few thousand USD. The deposit is non-refundable if the buyer withdraws from the purchase. If the seller withdraws from the sale, they must return twice the deposit amount.
  • Sales Agreement: Then, a sales agreement is signed, outlining the terms of the transaction, such as the property price, payment schedule, and transfer of ownership date. At this stage, the buyer pays a portion of the property price, usually around 50%.
  • Tax: The buyer pays a 4% tax on the property value.
  • Transfer of Title: The transfer of title from the seller to the buyer takes place. This process can take up to 2-3 months but can be expedited for an additional fee (2-3 weeks).
  • Final Payment: After the transfer of title, the buyer pays the remaining portion of the property price.

Additional Information:

  • In Cambodia, it is common for property owners to be foreigners who cannot be personally present during the signing of the sales agreement. In such cases, various solutions, such as powers of attorney, can be used.
  • Be cautious of fraud and always thoroughly check the legal status of the property before purchase.
  • It is recommended to seek the assistance of a lawyer and real estate agency to safely conduct the transaction.

You can find more about the process of purchasing a property in the article “The process of purchasing a flat in Cambodia

General Information about Cambodia

  • Cambodia is a country with a small and young population located in Southeast Asia, bordering Thailand, Vietnam, and Laos.
  • Major cities in Cambodia include Phnom Penh (the capital), Siem Reap (where Angkor Wat is located), and Battambang.
  • Cambodia’s economy is underdeveloped, and the GDP per capita is one of the lowest in the region.
  • Cambodia has a tropical climate with two seasons: dry and rainy. Temperatures are high year-round, and heavy rainfall is common during the rainy season.
  • Cambodia is a country with a rich history and culture. It is a popular tourist destination known for its beautiful beaches, temples, and monuments.
  • The official language of Cambodia is Khmer.
  • The currency of Cambodia is the US Dollar (USD) and the Cambodian Riel. (90% of transactions are conducted in USD)
  • Cambodia is a safe country for tourists, but caution should be exercised regarding petty theft.

Statistics:

  • Population: 17M
  • Religion: Buddhism (97%)
  • GDP per capita: $2,000
  • GDP (PPP): $6,500
  • Median age: 26 years
  • Average salary: $200-280
  • Disposable income per household: $460 (approx. $108 per person)

For more statistics, visit:

Cost of Living in Cambodia, Earning Opportunities:

Costs

Information about the cost of living in Cambodia. Prices can vary depending on location, lifestyle, and individual needs.

  • Unskilled Labor: Unskilled labor is very cheap, so all related services are inexpensive – cleaning, childcare, massages, renovations, etc.
  • Local Products: Fruits, vegetables, and meat are cheap. Prices are comparable to those in Europe.
  • Imported Goods: Everything that is imported is expensive, e.g., milk, cheese, cold cuts, exotic fruits, cars, perfumes.
  • Alcohol and Cigarettes: Very cheap due to limited excise duties.
  • Apartment Rent: Significantly cheaper than in Poland. A two-bedroom apartment in central Phnom Penh costs about $400-500 per month (in Warsaw over $1000).
  • Electricity: Can be a bit more expensive than in Poland.
  • Internet: More expensive and unstable.
  • Clothing: Very cheap.
  • Restaurant Prices: At least 50% cheaper than in Poland, even more outside Phnom Penh.
  • Monthly Expenses: It is estimated that one can live in Phnom Penh for $600-700 per month (excluding rent).

Sample Price Comparisons:

Earning Opportunities

  • Many expatriates live on passive income from investments, pensions, or foreign retirement benefits.
  • The job market for foreigners in Cambodia is very limited and primarily open to highly qualified individuals:
    • Teaching in International Schools
    • Non-Governmental Organizations (NGOs)
    • International and Large Local Companies: A very small market.
    • IT and Construction Sector: Project managers, etc.
  • In low and medium-skilled job segments, it is impossible to compete with local workers who earn $200-300 per month.
  • An ideal solution is remote work on contracts in Europe and spending money in Cambodia. This allows significant savings.
  • Consider starting your own business, but it requires market analysis and careful planning.

Pros and Cons of Living in Cambodia

Pros:

  • Easy Business Visa: A one-year business visa costs $500-600 and is easy to obtain. It is the easiest country to relocate to in the region.
  • Dollarized Economy
  • Low Cost of Living
  • Safety: The country is generally safe, with a low crime rate.
  • Warm Climate: Cambodia enjoys a warm, tropical climate year-round.
  • Numerous Tourist Attractions: Angkor Wat, beaches, islands, forests, and mountains.
  • Friendly People: Local communities are known for their hospitality.
  • Ease of Opening Bank Accounts and Capital Flow
  • Poorly Regulated Market

Cons:

  • Poor Infrastructure: Roads, transport, energy system.
  • Limited Job Market for Foreigners
  • Low Wages and Limited Middle Class
  • Lack of Access to Healthcare: Foreigners need private health insurance as public healthcare is limited.
  • Poor Education System: Public schools are not of high quality, and international schools are expensive.
  • Limited Cultural Life: The country lacks a vibrant music and arts scene.

Summary: Why Cambodia?

In summary, Cambodia is portrayed as a country with great potential for individuals considering relocation or real estate investment. Here are the key points:

  • Emerging Market: Cambodia is an emerging market offering long-term growth opportunities, reminiscent of future Thailand.
  • Ease of Relocation: The process of moving to Cambodia is easier compared to other Asian countries, making it an attractive choice for those seeking new opportunities in Asia.
  • Strategic Location: Located between Thailand and Vietnam, Cambodia serves as an excellent base for traveling around Southeast Asia.
  • Geographic Diversification: In the face of global uncertainties like conflicts in Europe, owning property in Cambodia can be a form of security and diversification.
  • Attractive Real Estate Prices: The real estate market in Cambodia offers competitive prices, much lower than in Poland, providing an investment opportunity.
  • Favorable Banking Conditions: Cambodia allows the maintenance of dollarized bank accounts not subject to the Common Reporting Standard (CRS), which can be beneficial for those seeking greater financial privacy.

Ta strona jest także dostępna w językach: Polski (Polish)

Compare listings

Compare