2023 new policy of GBB, Buy back after years, Is it “Trap or Treat?”

According to a report issued by the Ministry of Land Management, Urban Planning and Construction, as of 2022, the number of registered title certificates for strata and co-owned buildings (condominiums) has increased to 65,030, while the number of title certificates for registered transfers of strata and co-owned buildings with the ministry is 15,590.

This means that more than 75% of the strata units (condominiums) are still owned by developers.

At present, the condominium market in Cambodia has sufficient supply, and has experienced a trough for several consecutive years due to the covid-19. In order to promote sales, the developers have released various policies, and support for GBB is one of them.

〉〉〉The Meaning of GBB

The full name of “GBB” is Guaranteed Buy-Back, it means that when a real estate developer sells a house, it will promise with the buyer to repurchase the property at an agreed price after a period of time. This kind of property is called a repurchase house.

Most people think that repurchase is a risk protection for overseas real estate investment, which is equivalent to an insurance for the investment, so you can have no worries. But we know that benefits are always accompanied by risks. Therefore, Guaranteed Buy-Back has advantages and disadvantages for home buyers.

〉〉〉The Advantages of  Buying GBB Projects?

1. Risk control, no matter what the economic environment is, the funds can be recovered according to the agreed time, which is equivalent to saving a reserve fund for oneself. That is to say, if the price of second-hand housing falls sharply within the agreed time, we can sell back to the developer, and if the price rises, we can choose to continue to hold it;

2. We don’t have to worry about not being able to sell ours property, just go to the developer directly;

3. If the property is an existing house, we can rent out the house until the bay back date to earn extra income.

〉〉〉The Risks of Buying GBB Projects?

1. The time is limited. Usually, the developer’s bay back contract has a time limit and must be executed according to the limited time;

2. The Developers go bankrupt, some projects are not selling well, and developers will raise funds for themselves through the sale of buy back houses. If the developer goes bankrupt during this period and the property cannot be delivered, we will face the risk of not being able to get a house after spending money.

〉〉〉Which projects support GBB?

▌LIXIN CEO Center

Lixin CEO Center is located close to the Office of the Council of Ministers in Khan 7 Makara of Phnom Penh. It has 33 floors and a height of 130 meters, and it is designed in A&B twin-building.

Units for sale: office 73㎡-400㎡, condo 46㎡-138㎡, studio-2 Bed

GBB policy:

- Provide a 5-year buy back for Wyndham Hotel Apartment. In the 5th year, the owner can choose to ask the developer to buy back at the same price as the purchaser price.

- Provide 10-year buy back for the office. In the 10th year, the owner can choose to ask the developer to buy back at the same price as the purchaser price.

▌Vue Aston

Vue Aston  is located on the edge of the Mekong River in Phnom Penh, Facing Diamond Island CBD across the Bassac River. The project is 140 meters high and has 38 floors. It is a modern Phnom Penh landmark building integrating apartments and hotels.

Units for sale: studio-3 Bed, 31㎡-167㎡

GBB policy:

Provide 5-year buy back, and the following matters need to be noted:

① The purchaser shall make the formal and written request to the developer on its intention of exercising the Buy-back option no later than 3 months prior to the agreed Transaction Time.

② Buy-back shall happen in 5 years after the Developer hands over the possession of the unit to the purchaser according to the SPA, or a handing-over is deemed as having happened.

③ Buy-back Purchase Price, the developer will buy-back the unit of matter at the same price as the purchaser price set forth in the SPA.

▌Prince Happiness Plaza

Prince Happiness Plaza is located next to Monivong blvd, the bustling commercial area of Phnom Penh. It consists of a luxury condominium [MERRYLAND] and a business complex [SKYRISE].

Units for sale: Studio-2 Bed, size 32㎡-96㎡

GBB policy: Provide 5-year buy back. After 5 years, the developer will buy back 100% of the original price.

▌Kiripark Residence & Resort

Kiripark Residence & Resort is located in Sihanoukville, it is the largest vacation villa project between Phnom Penh and Sihanoukville, also a large-scale natural resort integrating service, entertainment and family leisure.

Units for sale: Suite Villa（331㎡）

GBB policy:  Provide GBB for special offer units, the buy back price is an addition of $30,000 to the SPA price.

〉〉〉The different GBB projects in overseas markets?

In fact, GBB projects are used differently for local customers and foreign customers.

For local customers, they are more interested in the residence and investment value of the project, but overseas customers will also obtain visa or naturalization qualifications by purchasing properties.

Although Cambodia is a small country, there are many benefits to obtaining Cambodian nationality: for example, you can own the permanent property rights of Cambodian land, travel freely in ASEAN countries (no visa required), allow multiple nationalities, do not review the source of funds and do not need to sit in the "immigration prison" and so on.

The two benefits of permanent land rights and free access to ASEAN countries are still very attractive to investors who focus on Southeast Asia.

Among the conditions for naturalization in Cambodia, it is clearly stipulated that the applicant must have a residence with permanent address in Cambodia.

In addition, there are many international schools in Cambodia, including ISPP International School, ICAN International School, Northbridge International School (NISC), Canadian International School (CIS), Shrewsbury International School Phnom Penh, etc. And buying a house near the school to accompany their child is also one of the reasons why overseas customers choose to buy property in Cambodia.

Of course, regardless of the purpose of purchasing GBB projects, you need to choose carefully.

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