Cambodia is in the spotlight and developers and real estate agents from around the world are now turning their focus to the country. That’s because Cambodian real estate investors are looking overseas in order to enjoy stronger returns as well as the other benefits such as permanent residency.
As the country’s economy has picked up, so too has the number of High Net Worth Individuals (HNWIs). This group continues to look for ways to diversify their portfolios and with competition for local property heating up, Cambodian HNWIs are starting to look beyond their own borders for real estate.
According to a Knight Frank report, the number of Cambodians with at least USD 30 million in net assets rose 170 percent between 2005 and 2015 with the number expected to increase until 2024.
“The growth in the number of super-rich over the last decade has been due to Cambodia’s strong economic growth,” Nicholas Holt, head of research at Knight Frank Asia Pacific, explained to the Khmer Times. “The solid economic performance has led to entrepreneurial opportunities that enable wealth accumulation, not just in the ultra-HNWI category, but also further down the wealth brackets.”
Cambodian real estate investors eye new opportunities
While the Phnom Penh property market has been growing in the past few years, there are some concerns in regards to stability. Additionally, some experts are worried about an oversupply of condominium units in the city.
Another motivating factor for Cambodian real estate investors buying overseas is the benefits it can bring, namely residency or a second passport. The Henley Passport Index ranks the Cambodia passport as the 86th best in the world as citizens only have visa-free travel access to 49 countries.
Having a second residency or citizenship makes it easier for children to attend schools outside of Cambodia. It can also provide more business opportunities in some cases since travel is no longer restricted.
Popular destinations for Cambodian outbound investment
Australia/New Zealand – Overseas investment has poured into the Australian and, to a lesser extent, New Zealand residential real estate markets since 2010. Part of the allure was due to the transparent process and tax structure as well as the strong demand rental demand in places like Sydney, Melbourne and Auckland.
In New Zealand, a clear path to citizenship is another key selling point. Should a buyer meet set qualifications and purchase a new-build, off plan apartment, they’re eligible for New Zealand Permanent Resident status, which provides access to free education and reduced university tuition fees in the country. Those who purchase property and live in the country for five years can then apply for New Zealand citizenship.
Cyprus – The island country in the Mediterranean Sea is another popular real estate investment spot for Cambodian investors. That is because it offers a straightforward path to EU citizenship and all of the benefits that it holds. Anyone investing in a property that costs a minimum of EUR 2 million is eligible.
Thailand – Neighbouring Thailand is a country many Cambodian real estate investors are now seriously considering. The market here is more mature with far more property types on offer. Meanwhile, prices in Thailand are affordable, making it a sensible alternative for first-time international investors.
This article can be found in Dot Property Magazine’s Southeast Asia Wealth And Outbound Investment Report 2018. Click here to read it.