Buoyed by a strong economy and massive infusion of cash from abroad, the Cambodian real estate industry has, in the last half-decade, enjoyed some of its best years.
The media is filled with stories on how foreign investors, attracted by the business potential and affordable land, are pouring capital into Cambodia, with most of this funding going to real estate.
But a lesser known, but equally significant trend is also flourishing in the background: Cambodians investing in real estate abroad.
After several decades of tumult, Cambodia transformed itself to become one of the fastest-growing economies in Southeast Asia. In the last decade, the Cambodian economy has grown by an average of 7 percent. In the process, many locals became wealthy. Many of these newly-rich personalities and families made it in the real estate business.
Between 2005 and 2015, the number of Cambodians with net assets approaching $30 million has increased by more than 170 percent, said to a Knight Frank study.
Nicholas Holt, Head of Research at Knight Frank Asia Pacific, explained to the local media that these super rich people are products of Cambodia’s strong economic growth.
While most of the leading players in the nation’s real estate are investing locally, there are some who are opting to invest abroad for a variety of reasons.
The most popular destinations of outbound Cambodian property investments include Australia, New Zealand, and neighbouring Thailand. Others have invested in property in the United States, Malaysia, Singapore, and Cyprus.
Some of these countries are actively courting wealthy Cambodians to invest in their own territories. For the first time, three years ago, a Malaysian-based developer GuocoLand offered pre-sold residential units to Cambodian investors.
The prospect of higher return, anxieties regarding political and economic stability, and strong competition are the main considerations behind this capital flight. The prospect of permanent residency or citizenship is alluring to these investors who look for the benefits they would gain. These include the ability to travel to most countries in the world visa-free and have their children educated in top schools abroad, which are hard to come by with only a Cambodian passport in tow.
The latest (2018) Henley Passport Index puts the Cambodian passport in 86th place, with visa-free access to only 49 countries.
A lawyer from Sokha Law Office earlier told the media that Australia has proven to be a popular destination for Cambodian developers and their money because of the quality of life and the many benefits it provides.
“It has always been viewed as a safe haven with a strong and established legal structure, asset protection and multi-cultural society. “Cambodian buyers are purchasing properties in Australia so that it can benefit their kids to stay during the time of their education, or doing business,” said Chan Mlop.
The cities of Melbourne, Sydney, and lately, Brisbane, are where most of the Cambodian property investments are located.
The same thing is said of New Zealand, of which the city of Auckland has proven to be the top drawer for Cambodian investors. For its part, Thailand is aided by the rich variety of properties on offer at relatively cheap prices. Meanwhile, Cyprus is popular because a minimum property investment of 2 million Euro ($2.3 million) provides a straightforward path to EU citizenship.
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Jose Rodriguez T. Senase is a content writer @ Realestate.com.kh