The prices of borey units is ridiculous. I've been around quite a few because a friend supplies materials to them. They are thrown up in no time, and often have what appears to be a good finish, but when you take a close look it's not so. Unfilled gaps, badly fitted trim, plaster/paint on fittings etc. They only come with short, maybe 3 year, warranties. You could easily pay $300,000 for a unit in some remote edge of the province. So the roads are all terrible, the place is next to an industrial park or empty lot/ swamp covered in garbage, there are no amenities nearby etc. It's crazy, you could get a very nice well-built house outside the capital city in most western countries for that price. The commute wouldn't matter so much as the road systems are usually very good, and there is often efficient public transport. And you'd be surrounded by trees, parks, lawns etc, not some garbage-strewn wasteland.

The previous posts nail it. I'll add my unstructured thoughts.

All markets are capable of behaving irrationally (I recommend reading The Misbehaviour of Markets by Benoit Mandelbrot). Perfect examples in the stock market now being NKLA and TSLA. In the West, residential real estate markets are primarily affected by the cost of borrowing - and that has been super cheap since 2008 and thus there has been massive price inflation.

In the same period, a psychology has developed globally whereby real estate is seen as a one way bet. In China, the government controls the markets and has ensured that prices don't go down. That has led to very high prices in China and their people to see Cambodian prices as good value,and with the added benefit of being priced in USD which gives them a FX hedge.
Low end rents in Cambodia have been drifting up in the same time period. Whenever the minimum wage rises, the rents around the factories famously go up in equal measure so the workers get no benefit.

Cambodians have started to see buying real estate as a one way bet and as a hedge against rising rents (although that is not actually happening in the mid and upper sectors). In addition, mortgage loans have become widely available for the first time. They have high rates but Cambodians have no comparators because it's a new market. Developers have a lot of units to sell so they have made their own loans available, something that the NBC has highlighted as dangerous. Many Cambodians have sold land at a nice price to Chinese buyers and have cash from that.

Most of the new build houses and (especially) condos will not be occupied for a while, either because they don't get finished, or they get finished and don't get sold, or they get sold but not occupied because the buyer is absentee and the rent is unaffordable or unattractive, given the location and/or the condition of the unit.

The market for high end condos has collapsed in NYC (e.g. the Hudson Yards development) but the market for suburban and exurban houses is red hot. That is driven by low loan rates out to 30 years and strict building controls, neither of which apply so much in Cambodia.

The global appetite for overseas property investment is bound to be affected by Covid travel restrictions. Think of all those buyers of units in Phuket that they cannot access or even let out.

I know a successful Khmer real estate investor and he is only buying land in the provinces atm, paying $5 psm maximum, often less than $1. Meanwhile building plots in secondary locations are being sold for $100 psm. This discrepancy can occur in the West due to severe control over building permits but is hard to justify here.

Nobody ever knows what any market will do in the future, all one can do is look at the facts and assess the probabilities. In the absence of low loan rates and the ability of people to afford the level of rents that the new developments are demanding, one has to be a little bit cautious.

I've often discussed this with friends and could only come to the same conclusion.

daeum_tnaot wrote: ↑Fri Sep 18, 2020 8:37 pm One difference though- in a western country you'd have to pay property tax, but do people here have to pay a property tax yet?

I believe you do as one of my friends is an old guy who is in charge of property tax for a large district here. I'm not sure at all how it works. There's a capital gains tax coming in soon too.
Also many of these borey companies hold the hard title to the land themselves and only sell customers the soft title. Apparently many only need a $30,000 deposit, but then the monthly
payment scheme is heavy and if you default they aren't shy about reclaiming the place either. I have heard there have been a huge amount of defaults in recent times.