What are the risks of buying property in Cambodia?

Phnom Penh’s condo market has been volatile and in a bubbly phase, mainly due to speculation and high supply.

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  1. The price of prpperty in Cambodia dropped by up to 50% during the first half of 2020.

    Now, I think we can both agree that’s a considerably risky market.

    Personally, I believe that acquiring units in new- or off-plan projects in prime locations is still your best option if you truly want to buy real estate in Cambodia.

    The process to acquire local flats is too complex and you have to deal with local ‘partners’, which brings risks in itself.

    No matter if you possess a sizable amount of money or are careful with your savings, why would you look for shophouses costing USD 50,000 – USD 100,000 in one of the least prosperous countries in Asia?

    Phnom Penh’s condo market is mainly to cater to foreigners, such as expats and Chinese travelers. Bringing your family to a narrow alley with sanitary issues is probably not your cup of tea.

    After all, we all strive for a higher living standard when staying in Asia.

    The Deal with Leasehold vs Freehold Most Southeast Asian countries, including Thailand, Cambodia, the Philippines, and Malaysia offer freehold ownership of property to foreigners.

    In short, this means that you own the property “outright”. Other countries such as Vietnam and Indonesia don’t allow foreigners to own property on a freehold basis.

    Instead, we have to buy the units on a leasehold basis, which is 50 years in Vietnam with a chance for renewal. This also puts some constraints when selling the property in case little time is left of that leasehold period.

    With that said, no one really knows what will happen in the coming decades, or possibly years. The country is known for being politically unstable and has experienced issues with land-grabbing in the past.

    Being one of the least developed countries in Asia and with strong ties to China , no one knows how foreign ownership will be affected in “50 years”.

    Source: asiapropertyhq.com

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