2
Introductions
4
Who took the Cambodia Real Estate Survey 2019?
8
How is the Cambodia property market?
11
Market demand
16
Real estate ďŹ nancing
17
General situation in Cambodia
18
Real estate industry feedback
21
Conclusion
Established in 2009, Realestate.com.kh has grown to be the foremost real estate portal in Cambodia, working with the nation's leading real estate agencies, developers and lenders. In 2015, Australia-based DCG partnered with founder Moek Chenda to develop the business rapidly. The platform, with content in Khmer, English and Chinese, showcases over 25,000 properties for sale and rent, and tens of thousands of property hunters visit the website and app each month. Realestate.com.kh also produces the biannual Cambodia Real Estate Magazine in English and Chinese and hosts a series of industry shows called Realestate.com.kh Expo. The event facilitated over US$30 million in direct sales last year alone. We would like to acknowledge the eorts of our team, real estate agents, developers and sponsors, without whom this survey would not be possible.
Realestate.com.kh, Cambodia's leading real estate platform, is delighted to share the results of this year’s Cambodia Real Estate Survey. The survey provides valuable insight into the Kingdom’s real estate industry, in all its diversity.
“On behalf of our team, I would like to thank everyone who took the time to complete the 2018 survey.” “As the second survey of its kind, this year’s results are especially interesting. We hope the public and private sectors find the data of value in future planning.” Tom O’Sullivan CEO Realestate.com.kh
This is the third version of our annual survey. Each year, we make changes and tweaks to our questions in order to best capture the state of the local real estate industry. However, many of the questions we ask are the same so that we can chart the changes occurring in real-time. In many ways, 2019’s data show a continuation of the growth we have seen in Cambodia over the past few years. In general, property ownership is on the rise, average incomes are rising, and younger people are becoming more active by both renting and owning property. One drawback we saw this year is the perceived affordability of the market. There was a slight move in the data where people are seeing property as less affordable than they did last year. This, in some part, could be due to the rising standards in the industry as more international businesses and expats enter the country. On the other hand, there is even more confidence this year in the growth of the market. The majority of our respondents have seen significant market growth over the last year, expect continued growth and think real estate is a good investment. Real estate developers in Cambodia are, for the most part, responding to this changing market. They see that more people are looking to become homeowners. This has led to an increasing amount of affordable condominium projects offering homes under $75,000 as well as breakneck expansion in the borey market.
With surveys like this it can be hard to distill them down into a central message. Well, I’m going to do exactly that right now. The continuing thread this year is about the younger generation. In most parts of the Western world, young adults don’t start thinking about homeownership until they are in their thirties or even forties. Here in Cambodia, this couldn’t be further from the truth.
“This year’s survey shows that Cambodia’s real estate buyers are growing and changing almost as fast as the country itself is.” “More young families are striving for homeownership than ever before.”
Tyler Lebens Editor Realestate.com.kh
With the Real Estate Survey 2019 we saw an increasing number of respondents in their late teens and early twenties. While these people are still making, on average, less than $1,000 per month (many are only working part-time), they are showing a firm interest in the real estate sector not only in terms of residence but also as investments. As Cambodia urbanises, incomes grow and family sizes shrink. This means young families are routinely bringing in $2,000 or more per month in disposable income while simultaneously pursuing homeownership in a safe and well-located community. More and more, these young families are taking out mortgages in order to buy borey homes or even small- or medium-sized condos in and around Phnom Penh. Whether you’re an aspiring real estate investor, a renter who is shopping for your first home, or an international tycoon looking for the next piece of your growing portfolio, we hope you find the data in this survey useful and insightful.
Over 2000 people, from a variety of backgrounds, responded to the Cambodia Real Estate Survey 2019. Realestate.com.kh aimed to create a question set that was relevant to speakers of Khmer, English and Chinese people. Age of respondents On the whole, this year’s respondents lined up closely to last year’s in terms of age. The youngest group, however, saw a big jump.
Almost three percent of respondents this year reported their age as 20 or younger. The same group was less than one percent of the total last year. As the level of education rises in the country, more youths are entering the workforce and actively participating in the economy. This, no doubt, has led many to start thinking about and researching homeownership and other real estate topics from a younger age.
Nationality
Purchasing power
The survey was relevant to anyone connected to the real estate industry in Cambodia. That said, the market is quite diverse, with both locals and foreigners occupying many roles.
Past Realestate.com.kh surveys have almost always shown an upward shift in purchasing power. This year, however, something dierent has occurred.
Nearly 74 percent of the respondents were Cambodian. The foreign demographic was mostly made up of Asian expatriates, though Westerners were also represented.
2018
2019
We did see growth in the lower-middle brackets. Yet there was a spike in those making $500 or less per month. This could be due to the participation of younger respondents, many of whom work only part-time.
It’s no surprise that those working in the real estate industry represented the largest single group of respondents. Indeed, those in banking and finance stay on top of the news coming out of the property sector. Many of these people use Realestate.com.kh for that express purpose.
Proportions for each industry were similar to those of the respondents last year. However, we saw growth in the number of students who answered our questions. This growth isn’t surprising given the previous questions about age and income. The fact that these young people are educating themselves on real estate is exciting for the country.
Living situation Similar to last year, the majority of respondents claimed to live with their partners or spouses. On the other hand, a slightly larger percentage of respondents claimed to live with their family, parents or grandparents.
There are two clear reasons for this movement: First, many of those living with a spouse last year have since started families of their own. Additionally, because of a more active and aware young generation, more people in their late teens or early twenties are keeping themselves informed about the real estate industry.
Affordability As the property market continues to grow and mature, many in the country can see prices rising. Yet, over half of our respondents still perceive the market to be affordable.
The scales are tipping somewhat, as fewer people this year perceived affordability. However, most people are confident that prices will rise and investments in the country will remain stable.
Is property in Cambodia affordable?
Property possession With this question, we wanted to know whether respondents were homeowners, on the way to becoming homeowners or renters. Unsurprisingly, homeownership grew slightly from last year. With the growing number of affordable projects in the market, more people are getting a chance to own property. This push for homeownership is also apparent in the number of people who said they are renting but have a desire to own; over 23 percent responded as such.
23.4% 50.8%
19%
12%
48%
2018
7.5%
20%
2019
18.2%
Do you own or rent?
Is it a better time to buy or sell property?
●
Buy a Property
●
Sell a Property
●
Full Owners
●
Own with loan
●
Renters
●
Renters but would like to own a house
Is it a better time to buy or sell? Buyers have expressed continued confidence in the property market, similarly to last year. Three-quarters of survey takers said it was a better time to buy property than sell it.
24%
2019
75%
The bullish sentiments continue the trend of the last few as people see development grow and prices rise.
Will growth continue? Looking more closely at perceptions of the property market, it’s clear that consumers think the expansion will continue. Nearly 85 percent said prices have increased over the last year, while over 77 percent think they will increase over the next year.
A whopping 86 percent of respondents claimed that buying real estate is a good investment. Indeed, real estate is one of the main avenues for investment in the country. Less than 14 percent of respondents had reservations about investing in real estate.
How have property prices changed over the past year?
How will prices change over the next year?
●
Increased
●
Increase
●
Decreased
●
Decrease
●
Stayed the same
●
Stay the same
13.6%
14.5%
1.8%
13%
16%
7.6%
9%
2018
2018 79%
78%
2019
77.7% 84.4%
1.8% 1.8%
Is buying real estate a good investment?
●
Yes
●
Not really
●
No
2019
2019
Do you plan to buy property? As the Cambodia property market opens up and diversifies, it seems that more people are planning to buy property. Over 78 percent of respondents plan to buy this year. What’s more, a significant proportion of these people will be first-time buyers.
Will you need a loan for your next property purchase?
Do you plan to buy property this year?
●
Yes
●
With more inclusion in the real estate industry, we are also seeing more participation in the banking and lending sectors. Over 75 percent of those planning to buy this year will need a loan for their purchase. This illustrates growing confidence in the country’s banking sector.
●
No
Yes
●
No
21.5% 24.4%
26%
2018 2019 74%
78%
75.2%
What type of property will you buy?
What type of property will you buy? The Cambodian property market has many distinct sections. Interestingly, nearly all the consumer segments were represented equally among respondents. Over 27 percent of people said they plan on buying a borey home this year. Just over 25 percent, meanwhile, said they were planning to buy a condo in a new development. Almost the same proportion had plans to buy an independent house or villa. Around 20 percent had plans to buy land.
Property in borey Condo in new development Land Independent house or villa Commercial space
0.7%
25.8%
These numbers show both the diversity of property buyers and demand in the country. No single type of property dominates the market, and dierent kinds have dierent appealing aspects.
27.7%
20% 25.5%
Will your property be a personal residence or investment?
Personal residence We then wanted to know whether people who plan to buy this year are looking for a personal residence or an investment property. The results echoed previous questions with strong evidence for a high level of conďŹ dence in the market.
Investment
34.4%
65.5%
Over 65 percent of respondents plan to buy property as an investment this year. The rest, meanwhile are looking to buy real estate that will become their primary residence. There are many opportunities for investment in the sector, and they are growing more numerous every day.
There was an intriguing shift this year in property budgets among our survey respondents. Again this year, most people said they were planning to spend $50,000 or less. However, this section of buyers was down signiďŹ cantly from last year. On the rise is the $50,001 to $75,000 segment. Last year, this section represented around 20 percent of respondents, whereas this year it was up to almost a quarter.
Little movement in high brackets This move reects not only rising budgets but also a growing amount of projects that are enticing buyers to spend more. No signiďŹ cant changes were seen in the middle brackets. Both $75,001 to $100,000 and $100,001 to $200,000 pulled in around 12 percent each. Likewise, the two highest segments each accounted for a relatively small proportion of respondents.
How much are you planning to spend on a property purchase this year?
Where do people want to buy? Phnom Penh is still the area in the country that commands most of the property demand. Over 77 percent of responders said they want to buy in the capital. This proportion is even up slightly from 2018’s data. Coming up in a distant second place was Siem Reap. Just over 7 percent of respondents claimed they want to buy there, while only 5 percent said the same for Kampot in the south. Sihanoukville, which claimed almost 10 percent of demand in last year’s survey, captured just 4 percent this year. Phnom Penh demand Demand for property in different areas of the capital remained similar to where numbers stood last year. Sen Sok and Chroy Changvar districts still command the highest demand; their leads became even more pronounced with this year’s data.
As always, respondents overwhelmingly said that location was their top factor when purchasing a property in Cambodia. A distant second was the potential for high returns. This reflects the high percentage of people who are planning to buy an investment property this year.
After all, a property’s location depends in large part on how easy it is to get to. The importance of infrastructure can already be felt in the outer areas of the capital. In these areas, land prices can vary wildly, due in part to the fact that some have access to main highways while others rely on small dirt roads.
Around 14 percent of survey respondents claimed that infrastructure was the most critical factor when buying property. As the country grows and urbanises, we see more pressure on the government to update and maintain the Kingdom’s road systems.
In years to come, we may see infrastructure become even more important to buyers. There’s also the balance between public and private infrastructure. In many boreys, for example, developers include parks, playgrounds and other spaces for their resident’s exclusive use.
Earlier in the survey, we saw that over 75 percent of respondents plan to take a loan for their next property purchase. Diving a little deeper, we wanted to see how much the average purchaser planned for their down payment.
Growth in the segment expecting to pay 30 percent is, no doubt, due to the popularity of the borey market. Though many borey developers offer in-house mortgages with no set down payment, many are taking loans through banks that still require 20 or 30 percent deposit.
The proportions who expected to put down nothing or less than 10%, both shrank from last year. This is a positive move, to be sure. This year, the majority of our survey takers plan to put down 30 percent.
Upper segments either shrunk or stayed relatively the same as last year. In general, most people are paying between 20 and 50 percent down payments.
5.4% 9.5%
How much will you pay as a down payment?
22.2%
4%
15%
25%
32%
●
No down payment
●
A 10% down payment
●
A 30% down payment
●
A 50% down payment
●
A 70%+ down payment
20% 36%
2018 2019
30.5%
General situation in Cambodia This year has been relatively quiet. Cambodian affairs, in most cases, haven’t caught the international press since the general election in July of 2018. Indeed, the vast majority of our respondents expressed the belief that Cambodia is improving as a country. Foreign direct investment (FDI) is on the rise and businesses are growing. The real estate sector, too, is playing off the breakneck progress of the nation. In addition to rising incomes and land values, international development companies are coming with an increasing number of projects. Not only is this progress bringing jobs and opportunities to the country, but it’s also making Cambodia more competitive on a regional level.
In general, do you think Cambodia is improving as a country?
●
Yes
●
The situation is staying the same
●
5.9%
2.3%
91.6%
No
As the real estate industry in Cambodia grows, Realestate.com.kh wishes to be a positive force in improving the sector. Paramount in this progress is keeping up with customer and client demands. Cambodia, as a country, is in the midst of an amazing period of growth. But pivotal to this growth is the bolstering of human resources, training and feedback, both internally and externally. This year, we again asked respondents about the changes they most wanted to see in the industry.
Answers were largely similar to those last year. Most people are calling for mandatory real estate agent licensure. This information falls directly in line with the need for training and education throughout the nation. As a testament to the industry’s growing professionalism, Realestate.com.kh has worked with the Ministry of Economy and Finance (MEF) and the Cambodian Valuers and Estate Agents Association (CVEA) to establish the Cambodia Real Estate Awards. This event serves to celebrate the nation’s ďŹ nest real estate professionals.
Following along this call for more training and education, we asked our responders what they value most in a real estate agent. SpeciďŹ cally, what factor do they look for most as the indicator of a good agent?
Under Cambodian law, agents must have the proper licence. The MEF, CVEA and Realestate.com.kh are all going to great lengths to ensure agents are getting the right accreditation.
Nearly 38 percent of respondents said that honesty was the top quality they looked for in a good real estate agent. Almost 27 percent, meanwhile, prized professionalism as the top factor when choosing an agent.
Additionally, both the MEF and CVEA have this year established industry-leading courses to provide education to the sector’s professionals.
Factors people consider when choosing a real estate agent (in order of most importance to least)
Pulling back the camera, we wanted to see how Realestate.com.kh stacks up to other resources for property in Cambodia.
Where do you get information about Cambodian property? (number of respondents)
Of course, there is a substantial selection bias here. Regular site visitors were the primary demographic for survey respondents. Yet, it is interesting to see what other places our users get information about real estate in the country. Unsurprisingly, the lion’s share of respondents get their real estate information online. Print media like newspapers and magazines were a driving force in Cambodia just a few years ago. However, only a small percentage of our respondents reported that they looked to print for real estate information. To look at how our own visitors are using Realestate.com.kh, we asked them what they use the site for. Most respondents said they used the site to search for properties for sale, while many also said they use it for property news.
What do you use Realestate.com.kh for? (number of respondents)
Young generation fuels rise of middle class This year’s Cambodia Real Estate Survey shows that the property market in the Kingdom is stronger than ever. Incomes in the country are rising and more people are looking to the sector for both residence and investment purposes. Amid an updating and diversifying economy, the demographics of the country are shifting as well. This year, this was apparent in how our respondents answered the questions in our survey. More young people in their late teens and early twenties are becoming active in the economy and preparing for adulthood and future homeownership. Meanwhile, more people are entering the middle class in the country and looking for affordable avenues toward homeownership. Many of these people are shopping for homes in boreys on the outskirts of the city. This option gives them the chance to own a home for less than $100,000.
Indeed, there is still a massive amount of confidence backing Cambodia’s real estate sector. People understand that prices have been on the rise, and the majority are confident that they will continue to rise as the months go on. Much of this confidence, no doubt, comes from the huge influx of foreign direct investment (FDI) in Cambodia. People are aware that international businesses see the potential for massive growth in the country. There are, however, a few drawbacks to this rapid growth. Despite a strong sense of confidence that real estate is a good investment, many think that prices are becoming unaffordable. What comes next? If Cambodia’s real estate market in 2018 were summed up in just a few words, most industry figures would mention the rise of Sihanoukville, new condo projects and borey developments on the outskirts of Phnom Penh.
While these three areas are still relevant today, they have each headed in slightly different directions. Sihanoukville, which was previously the hub of land speculation, has now become the prime location for hospitality developments like resorts and hotels. In the coming year, many of these projects will be officially complete and start welcoming visitors, renters and owners alike. Condos, which in past years were marketed almost exclusively to foreigners in the country, are now being offered at more affordable price points. This means more Cambodians will be both buying and renting these units.
Boreys, on the other hand, have always been geared toward local buyers. In the coming year, we will see the continued expansion of the borey sector in terms of price point, location and offerings. As the economy and real estate market of Cambodia continue to grow and diversify, Realestate.com.kh plans to remain a steadfast resource for everyone in the industry. We would like to thank everyone who took the time to complete the survey. For media or other enquiries, please email: info@realestate.com.kh
For media and other enquiries, please email: info@realestate.com.kh +855(0)17436756