Property Market Overview

Since 2000 Cambodia's economy has grown at an average rate of 9.5 percent, driven largely by an expansion in the garment sector and tourism. Despite pressure on US led exports in the wake of the sub-prime crisis and ensuing slowdown, coupled with the negative impact of higher energy and commodity prices, the IMF is forecasting that economic growth will remain at about seven percent at least until the end of 2009.

Cambodia's private sector has urged the government to allow foreign ownership of real estate in a bid to further promote economic growth. Cambodian investment law was amended back in 2005 to allow foreign ownership of permanent fixtures, but as yet has not been enforced. The non-implementation of the act has in fact rendered the amendments out dated and in need of review. In the current legal understanding, the old law will only allow a property investment in the name of a Cambodian national. Nuth Nurang, Secretary of State at Cambodia's Ministry of Land Management, Urban Planning and Construction has admitted that the government is still considering an amendment to Cambodia's law that would allow foreigners to buy property in the rapidly emerging market freehold. To date, foreign investors have only been permitted to buy on a leasehold tenure of up to 99 years - an option which has proved popular with buyers seeking to invest in Southeast Asia.

Vast new building projects have increased over the past few years, including a great number of satellite cities worth billions of dollars that when completed will fundamentally alter the appearance of the capital. After years of disorder within Cambodia, the country is now turning things around as a growing economy posting a steady 11 per cent growth over the last three years, fuelled by a strong tourism industry and clothing manufacture. That said, Cambodia still relies on international aid for half of its annual budget.

Major property investment regions
Phnom Penh, Siem Reap

Upcoming markets
Sihanoukville, Kep

PHNOM PENH

Phnom Penh became Cambodia's capital when the seat of government was moved from Angkor Thom in the wake of a Siamese invasion. French colonialists expanded the canal system to control the wetlands, constructed roads and built a port. By the 1920s, Phnom Penh was known as the Pearl of Asia and over the next four decades continued to experience growth with the building of a railway to Sihanoukville and an international airport.

When the city fell to Maoist Khmer Rouge rebels in 1975 Phnom Penh's entire population was deported to labour camps where disease, hunger and murder claimed somewhere between 1.5 and 2 million Cambodian lives. The Khmer Rouge were driven out of Phnom Penh by the Vietnamese in 1979 and people began to return to the city. Reconstruction began, spurred by continuing stability of government, attracting new foreign investment and aid by countries including France, Australia, and Japan. Loans were made from the Asian Development Bank and the World Bank to reinstate a clean water supply, roads and other infrastructure. By 2001 Phnom Penh was estimated to have finally reached its pre-conflict population level of one million and today it is the undisputed economic, industrial, commercial, cultural, tourist and historical centre of the fast-recovering country.Read the latest analysis of the Phnom Penh property market.

SIEM REAP

Siem Reap was little more than a village when the first French explorers re-discovered Angkor in the 19th century, but this soon changed as it began to absorb the first wave of tourists. The Grand Hotel d'Angkor opened its doors in 1929 and the temples of Angkor remained one of Asia's leading draws until the late 1960s, luring visitors like Charlie Chaplin and Jackie Kennedy. In 1975, the population of Siem Reap, along with the rest of the cities and towns in Cambodia, was evacuated by the communist Khmer Rouge and driven into the countryside.

As civil strife slowly ended the tourism industry built around Angkor rapidly developed. Today, Siem Reap is undoubtedly Cambodia's fastest growing city and it taking full advantage of its status as a gateway town to the world famous heritage site. Read the latest analysis of the Siem Reap property market.

SIHANOUKVILLE

Sihanoukville is nestled on a small peninsula with beaches and tropical islands off its south and west coast, and the commercial port to the north west. Beaches that line the west contour of the city from north to south are Victory Beach, Lamherkay Beach, Koh Pos Beach, Independence Beach, Sokha Beach, Serendipity Beach, Occheuteal Beach and Otres Beach. The most popular beaches are Occheuteal, Sokha, Independence and Victory.

Also known as Kampong Som, Sihanoukville was developed as a port city in southern Cambodia on the Gulf of Thailand. Like elsewhere it was devastated by the Khmer Rouge regime but as peace returned to the country, Sihanoukville quickly staked out its claim as the nation's most popular beach resort town. Read the latest analysis of the Sihanoukville property market.

KEP

Kep, located just a few kilometers from Ha Tien in Vietnam, was once Cambodia's most popular and prestigious beach town. From the early 1900's through to the outbreak of conflict in the 1960's Kep was a thriving resort for the rich French and Cambodian elite. During the Khmer Rouge years, much of Kep's French colonial era mansions and villas were destroyed.

Although Kep's coastline lacks the volume of high quality beaches dotted around Sihanoukville, it does have its attractions. The island of Koh Thons?y, with its white strands and notable natural dive sites, is just a short boat ride away. The town's seafood is cheap, plentiful and delicious - particularly the crabs. In addition, Kep is home to an extensive national park. Read the latest analysis of the Kep property market.

Essential information

Location
Cambodia is located in Southeast Asia and borders Laos, Vietnam and Thailand. Its coasts face into the Gulf of Thailand.

Area
Total: 181,040 sq km
land: 176,520 sq km
water: 4,520 sq km

Population
14,241,640

Language
Khmer is the official language of Cambodia and is spoken by 95 per cent of the nation's inhabitants. French, English and Vietnamese are also in use among sections of the population.

Religion
95 per cent of Cambodia's population are Theravada Buddhist. There are also small Christian and Cham Muslim communities.

Currency/Money
The official currency in Cambodia is the Riel (KHR). However, the American dollar is used for most purchases and is dispensed from ATMs. At present, 1.00 USD = 4,105.95 KHR.

Climate
Cambodia's temperatures range from 21? to 35?C (69? to 95?F) and has two distinct seasons. The rainy season, which runs from May to October, can see temperatures drop to 22 ?C and is generally accompanied with high humidity. The dry season lasts from November to April when temperatures can raise up to 40 ?C around April. The best months to visit Cambodia are November to January when temperatures and humidity are lower.

International dialling code
+855

Capital
Phnom Penh

Top

History

Following Japanese occupation in World War II, Cambodia gained full independence from France in 1953. In April 1975, after a five-year struggle, Communist Khmer Rouge forces captured Phnom Penh, marking the beginning of Pol Pot's brutal reign during which at least 1.5 million Cambodians died from forced hardships, starvation or execution. The December 1978 Vietnamese invasion drove the Khmer Rouge into the countryside, and touched off almost 13 years of civil war. The 1991 Paris Peace Accords finally paved the way for UN-sponsored elections in 1993 and allowed the formation of a coalition government, led by Hun Sen's Cambodian People's Party (CPP). A new round of elections in 1997 forced Prime Minister Hun Sen to share power, but he subsequently staged a coup, and has ruled the country ever since, making him one of Southeast Asia's longest serving leaders. Elections in 2003 were relatively peaceful, but it took one year of negotiations between contending parties before a coalition government was formed under the stewardship of Hun Sen.

A ubiquitous presence across the country and a tight grip on every level of government saw Hun Sen and his CPP see off rivals to take the last elections held July 2008. Hun Sen has notoriously undermined political opponents during his 23 year rule, but he has also steered the impoverished country out of the ashes of civil war and overseen a growing economy by promoting trade and tourism.

Top

Government

Formally, since the nation's constitution of 1993 was ratified, Cambodia is considered a constitutional monarchy operated as a parliamentary representative democracy. Prime Minister Hun Sen is the head of government and of a pluriform multi-party system, while reigning king Norodom Sihamoni is the head of state. The Prime Minister is appointed by the King, on the advice and with the approval of the National Assembly; the Prime Minister and his or her ministerial appointees exercise executive power in government. Legislative power is vested in both the executive and the two chambers of parliament, the National Assembly of Cambodia and the Senate. There are a number of rapidly developing opposition parties in Cambodia, the main players being the National United Front for an Independent, Neutral, Peaceful, and Cooperative Cambodia (FUNCINPEC), Norodom Ranariddh Party (NRP) and the Sam Rangsi Party (SRP).

Economy

Cambodia's per capita income is rapidly increasing, but is low compared with other countries in the region. Most rural households depend on agriculture and its related sub-sectors. Rice, fish, timber, garments and rubber are Cambodia's major exports. 2006 GDP was $7.265 billion (per capita GDP $513), with annual growth of 10.8 per cent. Estimates for 2007 are for a GDP of $8.251 billion (per capita $571) and annual growth of 8.5 per cent. Inflation for 2006 was 2.6 per cent and the current estimate for final 2007 inflation is 6.2 per cent.

The recovery of Cambodia's economy slowed dramatically in 1997-98, due to the regional economic crisis, civil violence, and political infighting. Foreign investment and tourism also fell off drastically. Since then however, growth has been steady. In 1999, the first full year of peace in 30 years, progress was made on economic reforms and growth resumed at 5.0 per cent. Despite severe flooding, GDP grew at 5.0 per cent in 2000, 6.3 per cent in 2001, and 5.2 per cent in 2002. Tourism is Cambodia's fastest growing industry, with arrivals increasing from 219,000 in 1997 to 1,055,000 in 2004. During 2003 and 2004 the growth rate remained steady at 5.0 per cent while in 2004 inflation was at 1.7 per cent and exports at $1.6 billion USD. As of 2005, GDP per capita in PPP terms was $2,200, which ranked 178th (out of 233) countries.

Fear of renewed political instability and corruption within the government discouraged foreign investment and delay foreign aid to some extent, although there has been significant assistance from bilateral and multilateral donors. Donors pledged $504 million to the country in 2004 while the Asian Development Bank alone has provided $850 million in loans, grants, and technical assistance.

The tourism industry is the country's second-greatest source of hard currency after the textile industry. 50 per cent of visitor arrivals are to Angkor, and most of the remainder to Phnom Penh. Other tourist destinations include Sihanoukville in the southeast which has several popular beaches, and the nearby area around Kampot including the Bokor Hill Station.

Top

Visas

All visitors, except citizens of Malaysia, Singapore, Philippines, and Laos, need a visa to enter Cambodia. The official price for a tourist visa is US$20, and US$25 for a business visa - but expect much higher prices (US$30 or more for the tourist visa) to be demanded at land border crossings.

Visas can be obtained at any Cambodian embassy or consulate overseas. Visas are also available "on arrival" at both international airports, all six international border crossings with Thailand, some international border crossings with Vietnam, and at the main border crossing with Laos. Tourist visas, when applied for in advance, are valid for 90 days (i.e. must be used within three months), and good for a 30 day entry permit stamp which can be extended once only for a further 30 days in Phnom Penh (or elsewhere via agencies) at a cost of US$15. Business visas are the best choice for stays over two months and/or multiple entries, as they can be extended indefinitely (approx US$140 per 6 month extension) and have multiple entry status when extended. Most Phnom Penh travel agencies process the extensions.

Citizens of most nations can now apply for an e-Visa online. The cost is US$25 (US$20 + US$5 processing charge) instead of the normal US$20. The service is excellent and you get the visa by e-mail in 3 business days.

Top

Healthcare

Cambodia has an extremely young population. 33.2 per cent of the population is aged from 0-14 years, 63.2 per cent are aged from 15-64 and just 3.6 per cent are 65 or over The average age in Cambodia is 21.7, which means the population generally is quite healthy despite the frequent lack of quality healthcare throughout much of the country. Sadly, the infant mortality rate is still high, and currently rests at total: 56.59 deaths per 1,000 live births. This figure has contributed to a low life expectancy, which is currently at 61.69 years.

Visitors should be aware that there are a number of diseases for which they should take precautions. They include bacterial and protozoal diarrhoea, hepatitis A, typhoid fever, dengue fever, Japanese encephalitis, and malaria. Foreigners should bare in mind that the hospitals in Cambodia are nowhere near the standard of those available in Vietnam or Thailand, and should they come down with a serious illness or sickness, then an evacuation to a neighbouring country may be necessary.

Travel

Cambodia has international airports at Phnom Penh and Siem Reap. Travellers going specifically to visit the Angkor temple ruins may prefer to use Siem Reap as it's only a few minutes away from the main sites; however as Bangkok Airways has a monopoly on direct flights between Bangkok and Siem Reap, it's a lot cheaper to fly to Phnom Penh and to take the bus (or cross overland from Bangkok).

Low-cost carrier Air Asia has introduced flights from Kuala Lumpur and Bangkok to Phnom Penh and Kuala Lumpur to Siem Reap, while Jetstar Asia has begun flying from Singapore to Siem Reap and Phnom Penh.

Many visitors choose to enter Cambodia by road from Thailand, and this can be done via six international border crossings which are open 07:00-20:00. All have visa-on-arrival facilities at the Cambodian immigration checkpoints.

Top