Recently we discussed some of the key themes around Sihanoukville and why there is a dual government drive to promote the region, as well as the reasons for why investors are still keen to see the area be developed to its full potential.
From large infrastructure projects, increased and more frequent transport links to international hubs by sea and air, tracking Cambodia’s Industrial Development Policy 2015-2025 & Sihanoukville Masterplan, as well as the plans to address the unfinished buildings in the city - there remain many reasons to be cautiously optimistic.
Settling in the region obviously offers the dream of a tropical seaside lifestyle that is still enviable for most retirees, remote workers, and long-term expats, and appeals to investors and Cambodians.
Off-plan condos are a type of property which is sold before construction has been completed (sometimes before it's begun!), or while construction is still in progress - but is there much supply and demand in the market in Sihanoukville? And what should buyers be considering when looking at an off-plan property?
Can Foreigners Buy A Property In Sihanoukville?
First of all, Cambodia’s favourable foreign property ownership laws continue to remain a strong drawcard for property buyers and investors who can acquire freehold condominiums which can then be rented or sold at their discretion.
Foreign or expat buyers can own a strata-title condominium outright with some minimal caveats (such as not being on the ground floor) which we have covered previously. It also means there is investment potential and resale potential as the condo unit, for example, can be sold and/or the property title can be transferred to another non-Cambodian at a later date.
This is why in all recent Cambodian property surveys, condos remain the most in-demand property type among foreign buyers in the Kingdom. With the advancement of the Trust Laws, there is rising interest in land ownership too through that mechanism.
Buyers should also be aware of the 19th Cambodian Government-Private Sector Forum (G-PSF) announcements of several tax updates relevant to the Cambodian property sector.
Buying A Condo In Sihanoukville - What To Consider
Purchasing off-plan properties has seen a dip in interest in Cambodia and buyers are more confident in purchasing in a condominium that is complete or nearing completion - in fact nearly twice as many preferred to invest in a condo that was ready to move into over an unfinished condo development.
Keep in mind, that one of the key trends we have highlighted in the Cambodian property market post-pandemic, is that due diligence is still required and sourcing developments from reliable developers with a good track record is paramount. There have been fewer buyers, or interest, in buying off-plan due to potential construction delays, or the very real fear (as Sihanoukville highlighted) of cases where a project might not be completed.
For context, many of the unfinished buildings in the city are casinos and larger developments that never materialised rather than condo developments.
Currently, the number of off-plan properties available on the market in the southern coastal city of Sihanoukville is limited to only a few developments, and those properties that are available are mainly villas and borey properties will are less sought after by foreigners due to the restrictions of foreigners legally owning the hard titles.
Financing Options For Your Condo Purchase in Cambodia
As is the case anywhere else in the Kingdom of Cambodia, there are different financing options available at condo developments for sale. Most often, bank mortgages and loans are exclusively available to Cambodian citizens unless there is some sort of collateral a foreigner can provide to the lender, such as local property titles or other reliable assets.
From affordable condos to luxury condo developments, foreign buyers will likely need the finances to buy the condo outright due to the difficulties in obtaining a mortgage from a bank in Cambodia, whereas local buyers will have a wider choice of financing options through Cambodian lenders.
In the case of off-plan properties, property and condo developers in Cambodia traditionally offer varying financing schemes to make buying the property easier. Payment options for purchasing property in the Kingdom of Cambodia for foreigners might include one of the following:
- Full Payments - This usually requires the full amount for a property to be paid within 30 days of signing the sales agreement.
- Monthly Installment Payments - These allow for regular payments over a set period of time to make the payment more manageable for property buyers.
- Bank Financing - Financing provided by a traditional lending institution such as a bank or credit union via a mortgage or loan (rare for foreigners to be eligible)
Sihanoukville Construction Sector
Kheang Phearum, spokesman of Sihanoukville Provincial Hall, said in October 2023, that 1069 high-rise buildings are being built or in the process of being developed in the city. Nearly half (475 buildings) are completed but a further third (364 temporary buildings) were halted due to paused investments.
To address this issue of halted projects, the government announced a long-term and phased package of measures to help build investment confidence and short-term market demand.
Crispian Knowles, Sales Manager in Sihanoukville for Realestate.com.kh says that new developers won't necessarily take on unfinished projects in the city due to a range of reasons which could be design or location, for example. The benefits of new developments are a commitment by the developer to finishing the project and also offering more attractive incentives, returns, and packages for buyers at representative market prices.
Popular Property Areas In Sihanoukville
This is a key consideration when looking at investing in a condo in Sihanoukville as well as the mid to long-term goals and returns.
There are some key districts or sangkats in the city:
- Sangkat 1: A busy district which is also the location of the Sihanoukville autonomous port and 18 km away from the airport.
- Sangkat 2: A residential area which also offers upmarket sea-view condos and local malls.
- Sangkat 4: A sought-after residential district with beachfront condos and the popular Ochheuteal and Serendipity beaches.
- Sangkat Bei: One of the condo-led areas with a mix of restaurants and malls.
- Sangkat Buon: Well-known for its pristine beachfront and accompanying apartments, villas, and condos
In terms of sizes, condos and apartments in Sihanoukville have an average floor area of approximately 58 sqm with the larger condos being 80+ sqm.
On the opportunities in the rental yields from the property market. Knowles sees Sihanoukville as offering rental yields of 8-10 per cent due to the low cost of living and high demand for rental properties in the city.
He adds that property developers are also now offering greater discounts on the remaining property stocks in Sihanoukville with some providing interest-free developer loans as well as increased agent commission incentives.
With affordable condo units available from around $45-50K and rising to over a million dollars for penthouse suites at in-demand locations, the median property price is around $120,000 in Sihanoukville - so potential buyers need to have a clear understanding of their strategy.