Cost of Living Now and Down the Road
Cost of Living Now and Down the Road
Just wanted to get some opinions on what cost of living might look like down the road in Cambodia. I know that there have been numerous posts on this subject and it all really boils down to the quality of life you feel comfortable with. I've read about people living on as little as a few hundred bucks a month all the way up to a number of thousands. Here's my question... my wife and I are on a fixed income of approximately $1300 a month. I understand you can live a modest lifestyle on that amount in PP or SR. Any guesses on how long that will remain the case as Cambodia continues its rapid development? Also, if a couple were to move further out into a rural town and live a very simple life, how much might they need on a monthly basis to sustain that lifestyle? I know it's impossible to predict economic trends very far into the future, but would love to hear some opinions on how much it might take to live a very simple life in Cambodia in the years to come. Thank you.
Re: Cost of Living Now and Down the Road
You can calculate how much you spend on food and drinks. That may go up a little gradually, like normal inflation.
What will happen, some of the cheap guest houses and hotels will be closed, and be replaced by more expensive ones. So those staying in them will pay more. Particularly in places like Phnom Penh.
Anyone staying long term, can rent an apartment or room. How much you pay depends on what you are happy to live in. Again these may go up gradually, like normal inflation.
If the Chinese take over any other area, there may be a big jump in that area.
You can think about what else you spend money on. Do you have a car?
So yes. If people have an income source which will not increase, and plan to stay in Cambodia for decades to come, it will cost more.
What will happen, some of the cheap guest houses and hotels will be closed, and be replaced by more expensive ones. So those staying in them will pay more. Particularly in places like Phnom Penh.
Anyone staying long term, can rent an apartment or room. How much you pay depends on what you are happy to live in. Again these may go up gradually, like normal inflation.
If the Chinese take over any other area, there may be a big jump in that area.
You can think about what else you spend money on. Do you have a car?
So yes. If people have an income source which will not increase, and plan to stay in Cambodia for decades to come, it will cost more.
## I thought I knew all the answers, but they changed all the questions. ##
Re: Cost of Living Now and Down the Road
At an inflation rate of 7.2%, prices double in 10 years. It is called the rule of 72 when you want to find out the doubling rate. For example, if there is inflation of 5% you divide 72/5 and that gives you 14.4, which is the years it take for the number to double. So, a $10 meal, with 5% inflation, will be $20 in 14.4 years.
It's just a useful tool to work out what prices might look like over time. Cambodia's inflation official inflation rate is just over 3%, however many people will tell you that prices have increased much more than 3% over the last 10 years. The trouble with official inflation rates is they use a 'basket' of different goods and services to arrive at their calculation. Some of those items in the basket will have risen much more than the average rate, some much less. Some might be in deflation. As a result governments can get the inflation rate they want simply by putting in the low inflation or deflating items items (such as electronics - mobile phones for example) and leaving out high inflation items (such as rents!). There is a whole conspiracy theory community out there who specialise in this one! Figures don't lie, but liars can figure!
Your personal inflation rate will be unique to you, it depends on what you consume. But I would think that rent, probably your single biggest monthly outlay, will be subject to an inflation rate much higher than 3%. If rent increase by 10% per annum (not unusual) then your rent will double in 7.2 years.
If you decide to live in the city then I think you can expect some nasty shocks with rent increases over time. Out in the sticks time might stand still a bit more.
Keep an eye on wage inflation here, it is running at about 7%. I think that wage inflation is a much better guide to what the true inflation rate really is.
"The minimum monthly wage of workers in textiles and footwear industry in Cambodia rose by 7 percent to USD 182 in January of 2019. Minimum Wages in Cambodia averaged 130.25 USD/Month from 2014 until 2017, reaching an all time high of 153 USD/Month in 2017 and a record low of 100 USD/Month in 2014."
Here is a couple of charts and a source link. The first chart is the official inflation rate. The second one the minimum wage inflation rate (for textile workers). When the minimum rate increases, so do the rents!
I hope this helps...
https://tradingeconomics.com/cambodia/minimum-wages
It's just a useful tool to work out what prices might look like over time. Cambodia's inflation official inflation rate is just over 3%, however many people will tell you that prices have increased much more than 3% over the last 10 years. The trouble with official inflation rates is they use a 'basket' of different goods and services to arrive at their calculation. Some of those items in the basket will have risen much more than the average rate, some much less. Some might be in deflation. As a result governments can get the inflation rate they want simply by putting in the low inflation or deflating items items (such as electronics - mobile phones for example) and leaving out high inflation items (such as rents!). There is a whole conspiracy theory community out there who specialise in this one! Figures don't lie, but liars can figure!
Your personal inflation rate will be unique to you, it depends on what you consume. But I would think that rent, probably your single biggest monthly outlay, will be subject to an inflation rate much higher than 3%. If rent increase by 10% per annum (not unusual) then your rent will double in 7.2 years.
If you decide to live in the city then I think you can expect some nasty shocks with rent increases over time. Out in the sticks time might stand still a bit more.
Keep an eye on wage inflation here, it is running at about 7%. I think that wage inflation is a much better guide to what the true inflation rate really is.
"The minimum monthly wage of workers in textiles and footwear industry in Cambodia rose by 7 percent to USD 182 in January of 2019. Minimum Wages in Cambodia averaged 130.25 USD/Month from 2014 until 2017, reaching an all time high of 153 USD/Month in 2017 and a record low of 100 USD/Month in 2014."
Here is a couple of charts and a source link. The first chart is the official inflation rate. The second one the minimum wage inflation rate (for textile workers). When the minimum rate increases, so do the rents!
I hope this helps...
https://tradingeconomics.com/cambodia/minimum-wages
Re: Cost of Living Now and Down the Road
Would you be happy to go and live in a village?
My big concern is security. They may know you have a computer, and other expensive items. These may disappear one day.
Apart from the security issue, there are some villages (not all) where it would be nice to live. Someone said to me a couple of days ago, you can rent my house for $30 a month. I didnt go and have a good look, but it was a typical Cambodian house.
You would probably want to be good friends with a Cambodian family, and have them watch it when you are not there. Often a group of relatives live near each other.
My big concern is security. They may know you have a computer, and other expensive items. These may disappear one day.
Apart from the security issue, there are some villages (not all) where it would be nice to live. Someone said to me a couple of days ago, you can rent my house for $30 a month. I didnt go and have a good look, but it was a typical Cambodian house.
You would probably want to be good friends with a Cambodian family, and have them watch it when you are not there. Often a group of relatives live near each other.
## I thought I knew all the answers, but they changed all the questions. ##
Re: Cost of Living Now and Down the Road
Thank you for your answer. Both of us are a bit older now. Our partying days are pretty much behind us. We no longer smoke or drink. My wife is Korean and I have lived in Korea for many years as well as Korean communities in the States. Very used to simple diet, rice, fish, some meat occasionally, vegetables fruit... Life style is very minimalist... Most likely no need for a car or many types of western amenities... I've heard the Chinese are investing heavily in Cambodia... PP, Sihanoukville, Kampot(?). Do you think SR is also a big target for Chinese investment?explorer wrote: ↑Wed Apr 17, 2019 10:45 am You can calculate how much you spend on food and drinks. That may go up a little gradually, like normal inflation.
What will happen, some of the cheap guest houses and hotels will be closed, and be replaced by more expensive ones. So those staying in them will pay more. Particularly in places like Phnom Penh.
Anyone staying long term, can rent an apartment or room. How much you pay depends on what you are happy to live in. Again these may go up gradually, like normal inflation.
If the Chinese take over any other area, there may be a big jump in that area.
You can think about what else you spend money on. Do you have a car?
So yes. If people have an income source which will not increase, and plan to stay in Cambodia for decades to come, it will cost more.
Re: Cost of Living Now and Down the Road
Thank you for that information and for the heads up on keeping a close eye on the wage inflation. It seems that over time our only choice may be to avoid the areas heavily populated by foreigners and live out in the countryside maintaining a very simple lifestyle.Doc67 wrote: ↑Wed Apr 17, 2019 10:50 am At an inflation rate of 7.2%, prices double in 10 years. It is called the rule of 72 when you want to find out the doubling rate. For example, if there is inflation of 5% you divide 72/5 and that gives you 14.4, which is the years it take for the number to double. So, a $10 meal, with 5% inflation, will be $20 in 14.4 years.
It's just a useful tool to work out what prices might look like over time. Cambodia's inflation official inflation rate is just over 3%, however many people will tell you that prices have increased much more than 3% over the last 10 years. The trouble with official inflation rates is they use a 'basket' of different goods and services to arrive at their calculation. Some of those items in the basket will have risen much more than the average rate, some much less. Some might be in deflation. As a result governments can get the inflation rate they want simply by putting in the low inflation or deflating items items (such as electronics - mobile phones for example) and leaving out high inflation items (such as rents!). There is a whole conspiracy theory community out there who specialise in this one! Figures don't lie, but liars can figure!
Your personal inflation rate will be unique to you, it depends on what you consume. But I would think that rent, probably your single biggest monthly outlay, will be subject to an inflation rate much higher than 3%. If rent increase by 10% per annum (not unusual) then your rent will double in 7.2 years.
If you decide to live in the city then I think you can expect some nasty shocks with rent increases over time. Out in the sticks time might stand still a bit more.
Keep an eye on wage inflation here, it is running at about 7%. I think that wage inflation is a much better guide to what the true inflation rate really is.
"The minimum monthly wage of workers in textiles and footwear industry in Cambodia rose by 7 percent to USD 182 in January of 2019. Minimum Wages in Cambodia averaged 130.25 USD/Month from 2014 until 2017, reaching an all time high of 153 USD/Month in 2017 and a record low of 100 USD/Month in 2014."
Here is a couple of charts and a source link. The first chart is the official inflation rate. The second one the minimum wage inflation rate (for textile workers). When the minimum rate increases, so do the rents!
I hope this helps...
https://tradingeconomics.com/cambodia/minimum-wages
Re: Cost of Living Now and Down the Road
I can only say that Cambodia has gotten noticeably more expensive over the last 10 years in terms of groceries. What used to be 20,000 riel is now closer to $20. Real estate in most areas in Phnom Penh has also gone through the roof, the office building next to us was purchased for $300,000 early in the decade and sold for $6 million a couple months ago.
Just anecdotal.
Just anecdotal.
Re: Cost of Living Now and Down the Road
The world is a big target for Chinese investment.
The Chinese would like to completely take over this part of the world.
It is difficult to predict what they will be permitted to do, or where they will invest in the future.
If they do invest big time in SR, there are many other places in Cambodia, but even they may be affected.
## I thought I knew all the answers, but they changed all the questions. ##
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Re: Cost of Living Now and Down the Road
The official inflation rate would be a lot higher if it weren't for the fact that some items have not gone up at all over the last 10 years. Take for example ,, bananas ,
large drinking water , is still $1 or less, and mangoes [ today ] 2,500 r a kg.
large drinking water , is still $1 or less, and mangoes [ today ] 2,500 r a kg.
Cambodia,,,, Don't fall in love with her.
Like the spoilt child she is, she will not be happy till she destroys herself from within and breaks your heart.
Like the spoilt child she is, she will not be happy till she destroys herself from within and breaks your heart.
Re: Cost of Living Now and Down the Road
You don't have to live in the most remote boonies to pay lower prices than Phnom Penh. Stick to the provincial centers and you could live on 1.300 USD - for now, and probably some years more. But prices have been on the rise (just like everywhere else by the way). When it comes to cost of living I believe Vietnam and Thailand both offer more bang for the buck in general (I wouldn't have thought so10 years ago....) so I would give those an eye too.
Outside of Phnom Penh you should be able to find a place to live for 100-200 USD a month, local groceries will be relatively cheap but if you fancy stuff like yoghurt or muesli life becomes seriously more expensive. Also take the costs of paperwork into account. The visa will be about 300 USD per person per year and if you live remotely there will be no 'agents' so a visa extension will cost you more because you will have to travel to Phnom Penh. If you stay out in the boonies travelling to Phnom Penh will be nice though because it'll break the (healthy but) boring daily routine. Stocking up on (good, branded) medicine might be another reason to visit the Penh. Same for seeing a doctor being able to make a real diagnosis. I used to like Kampong Cham, and could have lived there, but it has changed a lot over the last 10 years and it isn't the sleepy city it used to be anymore. I live about 550 KM from Phnom Penh. Quiet, cheap, silent, peaceful, but boring and still have the need to go to Phnom Penh several times a year (visa extension, driver license extension, doctor, stocking up on food and medicines [although not as bad as it used to be], flights out, ....).
Outside of Phnom Penh you should be able to find a place to live for 100-200 USD a month, local groceries will be relatively cheap but if you fancy stuff like yoghurt or muesli life becomes seriously more expensive. Also take the costs of paperwork into account. The visa will be about 300 USD per person per year and if you live remotely there will be no 'agents' so a visa extension will cost you more because you will have to travel to Phnom Penh. If you stay out in the boonies travelling to Phnom Penh will be nice though because it'll break the (healthy but) boring daily routine. Stocking up on (good, branded) medicine might be another reason to visit the Penh. Same for seeing a doctor being able to make a real diagnosis. I used to like Kampong Cham, and could have lived there, but it has changed a lot over the last 10 years and it isn't the sleepy city it used to be anymore. I live about 550 KM from Phnom Penh. Quiet, cheap, silent, peaceful, but boring and still have the need to go to Phnom Penh several times a year (visa extension, driver license extension, doctor, stocking up on food and medicines [although not as bad as it used to be], flights out, ....).
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