The Big Picture: Cambodia's Property, Investment Growth in 2022
Despite global supply chain issues, the ongoing Ukraine-Russia conflict, remnants of the covid-19 pandemic, and cases of monkeypox arising around the world, the outlook remains positive for investing in Cambodia, from property development to international business.
The Kingdom’s economy has been making a swift recovery despite taking a hard blow from covid-19 due to the impacts on travel and tourism, a major sector. By the end of 2022, it is set to hit 6.3% gross domestic product (GDP) growth, exceeding previous projections made by major global financial agencies.
In terms of inflation, Cambodia’s rate is predicted to reach 4.7% this year, and drop to 2.2% in 2023.
Chea Chanto, governor of the National Bank of Cambodia (NBC), also predicts economic growth of 5.3% for the country as it continues to benefit from the Regional Comprehensive Economic Partnership (RCEP) established at the start of this year: increasing exports worth $3.28 billion recorded from January to June, an anticipated rise in employment due to increased production, and consequent growth in construction, property development, and knowledge-sharing linkages.
During this time period, there were also a total of 63 private investment projects approved by the Council for the Development of Cambodia (CDC) outside of the country’s designated special economic zones—45 more projects than the same period in 2021.
Foreign, domestic investors both major players
There is a rich diversity of foreign investment, including Thailand, Samoa, the British Virgin Islands, South Korea, Singapore, Cayman Islands, Malaysia, Japan, Australia, and China, which remains the top foreign investor in Cambodia holding 43% of the total foreign investment.
Not to be outdone, domestic investments have nevertheless topped the market so far this year at $1.59 billion, even more than what came in from Chinese investments in the first half of 2022.
A similar trend has been observed in the property market, a sector that had previously been dominated by foreign buyers. This may be partially attributed to how real estate companies like IPS re-strategized and provided incentives to those who chose to stay in Cambodia during the pandemic, which opened opportunities for the middle-class market and other customers to acquire properties.
A survey by Realestate.com.kh also indicates today’s strong demand for housing in Cambodia, ranging from first-time buyers to local and international investors. Over 90% of respondents were confident that buying property in Cambodia is a good investment.
Many players continue to look forward to a bigger surge in direct investment, their confidence sustained by how the Kingdom successfully revitalized its economy through ceasing health restrictions this year. A key factor in this was the all-out vaccination drive once they were made available.
Things are undoubtedly looking sharp for the property industry, as the Deputy Prime Minister and Minister of Economy and Finance himself, Aun Pornmoniroth, shared an estimate of 4.8% growth in the real estate sector. This is said to be driven by the existing demand for housing and office properties alike.
Similarly, the NBC predicts gradual growth in the real estate and property sector as the year progresses due to the resumption of pending construction projects.
Construction is expected to grow by 6.3% this year and register an annual average growth rate of 9.4% until 2026, based on ongoing investments in infrastructure and commercial and residential sectors as reported in the Businesswire Cambodia’s Construction Industry Report 2022.