Guide to Home Ownership in Cambodia

The Cambodian property market has been witnessing remarkable growth in recent years, attracting both local and foreign investors seeking opportunities. As the capital city of Phnom Penh is experiencing rapid urbanisation, it becomes essential for potential buyers to navigate the diverse landscape of property type and ownership. Among the two prominent property options, condominiums and villas/houses, each offers unique advantages and considerations for prospective owners. However, the question arises: What type of ownership do they fall under?

In this guide, we delve into the property types, eligibility criteria, and considerations associated with purchasing condos and villas/houses in Cambodia. Whether you are a first-time buyer or an experienced investor, understanding property and ownership types will help make well-informed decisions.

Importance of Choosing The Right Property & Ownership 

Choosing the right property and ownership type is of utmost importance for a successful investment. A critical factor to consider is the property's potential for resale. In Cambodia, properties are classified under different ownership types like hard title, soft title, or strata title, and each type can significantly impact the property's marketability and resale value. It is crucial for buyers to be aware of the level of security each ownership type provides, as some may carry more risks than others. To learn more about this topic, you can read further here.

Types of Property in Cambodia: Condo

Definition Of Condominium

A condominium, often referred to as a condo, represents a distinctive form of residential property where individual owners possess private units within a larger building or complex. These unit owners maintain exclusive ownership over their respective spaces while concurrently sharing access to communal areas, facilities, and amenities with fellow residents. In Cambodia, condos have garnered significant popularity, particularly among foreign buyers, due to the Strata Title concept, making them the sole property type that allows foreigners to own real estate in the country.

What Is A Strata Title?

The acquisition of Strata Title is subject to specific criteria that must be met for a property to be eligible. Firstly, this form of ownership is only applicable to buildings constructed in 2010 and later, ensuring that newer properties fall under this classification. Secondly, foreign ownership is limited to 70% of the total surface area of the building or property, ensuring that a significant portion of the property remains accessible to Cambodian citizens or entities. Additionally, Strata Title cannot be granted for properties located on the ground floor or underground, preserving the integrity and exclusivity of such areas for other ownership types. Lastly, properties within 30km of the nearest land border are ineligible for Strata Title, potentially serving as a protective measure to regulate foreign ownership in areas close to national borders.

What Are The Characteristics of Condominiums?

Condominiums possess characteristics that make them an attractive housing option for many individuals. One of the key factors is the amenities they offer. Condos might have facilities such as restaurants/cafes, swimming pools, fitness centres, communal lounges, and landscaped gardens, providing residents with an enjoyable lifestyle. Developers innovate with different concepts to make it appealing to property seekers to enjoy an enhanced and modern lifestyle. These may include architectural designs, eco-friendly features, smart home technologies, and communal spaces. Moreover, the emphasis on security is another appealing aspect of condominium living. Many condos implement security measures, including gated entrances, surveillance cameras, and on-site security personnel. Additionally, condos are designed to offer convenience. With maintenance and management services provided, residents can enjoy a hassle-free living experience, as tasks like cleaning, repairs, and common area maintenance are typically taken care of. The combination of these characteristics makes condominiums a sought-after choice in the real estate market. 

Who Is Likely To Buy/Rent A Condo?

Potential buyers/renters of condos are often individuals or couples seeking a comfortable urban living experience. Young professionals, and expatriates, looking for low-maintenance and convenient accommodations are attracted to condos. They often choose to live in condos due to the convenience of amenities and proximity to city centres. Renting also appeals to those who wish to experience the lifestyle and facilities offered by condos without the long-term commitment of ownership.

Where Are Condos Located?

Condos are typically located in prime urban areas, offering convenience, accessibility, and modern living. In Phnom Penh, BKK, Chamkarmon and Tonle Bassac are the prime locations considered to be highly sought after. The prime locations ensure easy access to essential amenities, public transportation, shopping centres, schools, hospital, restaurants, and other attractions. Additionally, condos often have city skyline views appealing to many.

Types of Property in Cambodia: Villa/House

Definition Of Villa/House

A villa or house is a type of residential property characterised by its standalone structure on landed property. It provides exclusive living spaces for individual(s) or family occupancy. Unlike condominiums or apartments, villas/houses do not share common walls with other units and are typically surrounded by open spaces, gardens, or yards. Its prime characteristic is privacy, allowing residents to enjoy a more secluded and spacious living environment. Villas/houses often come with multiple rooms, including bedrooms, living areas, kitchens, and bathrooms, providing ample space for families or individuals. 

Who Is Likely To Buy/Rent A Villa/House?

Villas and houses appeal to families seeking larger living spaces, outdoor areas for recreation or gardening, and a greater degree of independence are more inclined to choose a villa or house over other types of properties. Families with children and pets may find villas/houses especially attractive due to the additional space and freedom for their loved ones to roam and play. Moreover, individuals or households who value tranquillity, away from the hustle and bustle of urban areas, often opt for villas/houses in suburban or rural locations. 

Where Is A Villa/House Likely To Be Located?

Villas and houses are often found in suburban or semi-rural areas, away from the densely populated city centres. These properties are more commonly situated in residential neighbourhoods characterised by larger land plots and a quieter atmosphere. Additionally, some villas may be located on the outskirts of cities, providing residents with a quiet living experience while maintaining proximity to essential urban amenities and services. Toul Kork and Sen Sok are good examples of where villas/houses can be found as many Cambodian families do live in this area. 

Villa/House Ownership Mechanism 

Villas and houses are referred to as landed properties, therefore they have a different ownership mechanism compared to condominiums. One prevalent ownership option is freehold, also referred to as hard titles. Freehold properties provide a sense of security, as owners have full and perpetual ownership rights over the land and property. However, for foreign investors, this type of property faced some restrictions in Cambodia with freehold ownership. An alternative ownership mechanism is a using trust service, nominee structure, a leasehold or via a land holding company, where buyers obtain the right to obtain the property.

To learn more about ownership mechanisms for foreigners read our guide here.

Factors To Consider Before Buying Condo Or Villa/House

Before buying a property, several crucial factors warrant careful consideration to ensure a wise investment decision. First and foremost, evaluating the investment potential is vital, taking into account factors like the property's appreciation and rental yield. Next, assessing the location and infrastructure surrounding the property is crucial. Proximity to essential amenities, transportation hubs, schools, and recreational facilities can significantly influence the property's desirability and value. Additionally, assessing the property's condition is essential to ensure the quality and reliability of the investment. Lastly, understanding current market trends is essential for the property's potential resale value. By carefully weighing these factors, potential buyers can make informed choices and guarantee returns on their property investment.

If you are new to Cambodia's property costing and others, speak to our real estate expert today. At Realestate.com.kh, we provide free viewing and consultation with accurate and latest information when it comes to properties tailored to your needs. Contact us today to learn more. 

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