Should You Invest?
Cambodia is fast becoming an established country in the
international arena. High GDP growth rates indicate a booming
economy that is developing at a phenomenal rate, and when coupled
with the country's low inflation rate of 3% the overall economic
outlook is extremely bright. With the projected continued expansion
in the tourism sector and the subsequent effect this will have on
the property market, plus with recent oil, gas and mineral
discoveries, the country's economic future appears inimitable. That
said, this is still a country simultaneously underscored by some
very real elements of risk: Corruption is rife, the infrastructure
is still unstable and many sectors require much development before
they can be classed as dependable. Those willing to shoulder the
risk then, could buy into one of the investment markets of the
future and providing comprehensive legal advice is sought, and
purchasers stick to developed areas of the country, this high risk
market could also be one characterised by high returns.
- Rapid development with strong GDP growth figures
- Early stages of development so prices are still very low
- Prices and economy are set to develop rapidly, giving great
returns.
- Country is still young and hasn't completely recovered from its
past so corruption is still prevalent.
- The infrastructure of the country, and the economy as a whole
are still weak and equate to high risk levels for potential
investors.
- High risk but potentially high returns.
Rental Yields
The investor can expect to encounter a wide range of rental
yields across the Cambodian property market, as demonstrated in the
table for Phnom Penh. Some new developments across Cambodia come
with 10% rental yields guaranteed for two years, although it is
likely that the 10% yields will continue for longer.
Price History
There is barely any price history for the property market of
Cambodia as it is in the very early stages of its youth and only
just beginning to create a history of developments. When Cambodia
discovered its freedom and its economic market was allowed to
develop, the property market came to life as people realised that
land carried wealth. Unfortunately this brought about lots of
unregulated land transactions with no record buying and selling.
This has resulted in a land registry that is very out of date.
In addition, the rapidly escalating prices rising in line with the
economy mean that there is no relative price index to gauge a
property's worth.
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