Compass Real Estate > Cambodia Real Estate Information > Popular Development > Land price tripled 4 years, half of foreign investors in Southeast Asia comes from China

Land price tripled 4 years, half of foreign investors in Southeast Asia comes from China

2019-04-13
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Summary:11 thousand USD in family income(39 thousand in Shanghai) has become the one of land price grow fast.

11 thousand USD in family income 939 thousand in Shanghai) has become the one of land price grow fast.

Bloomberg cited data from CB Richard Ellis, a real estate services consultancy, saying that the price of high-end apartments in Phnom Penh in the second quarter of this year reached $3,200 per square meter, 60% higher than five years ago. The local high-end business district of Daun Penh has a land price of more than $9,000 per square meter, almost three times that of 2014.
At the same time, the supply of Phnom Penh apartments is expected to double this year to approximately 20,000 units. For the second poor country in Southeast Asia, the market size and asset prices of both ends of real estate supply and demand are rising, apparently not driven by the purchasing power of local people.
“Only a very small number of Cambodians have the ability to buy these apartments,” Ross Wheble, head of international real estate company Knight Frank in Cambodia, told Bloomberg. At present, the multiple of Cambodia's housing price/per capital GDP is as high as 227.93 times, ranking second in Asia (the first is India).

Chinese capital is regard as the important push powder in Cambodia land price.

Similar to China’s economic structure after the reform and opening up, Cambodia’s economy is very dependent on foreign direct investment. They use the market to exchange funds from countries and economies such as ASEAN, Japan, South Korea, China, and the United States, so that the latter can be built in Cambodia. Infrastructure, innovation in manufacturing.
Last year, Cambodia obtained a total of about $2.732 billion in foreign direct investment (FDI). The Curiosity Daily has not been able to find data on foreign capital inflows by country and industry. However, according to the ASEAN Council's annual investment report, this figure was approximately US$2.28 billion in 2016, of which 16% of foreign capital flowed into the Cambodian real estate market. China was the largest capital inflow country in Cambodia that year, accounting for 22% of FDI in Cambodia. Hong Kong, China, followed closely, accounting for about 11%.
Manufacturing is still the most favored area for Cambodia to obtain foreign investment, and 28% of foreign investment is in this area, but there is little Chinese capital. When Nippon Denso and NHK established their production lines in Cambodia, Chinese capital flowed into the Cambodian real estate industry around 2016, so that the proportion of real estate investment in FDI jumped directly from 0% in 2015 to 16%, and China Real Estate The number of Phnom Penh apartments supplied by developers has become the third largest source of supply in the region.

Guangzhou Yuetai Group has 24 high-rise buildings along the river in Phnom Penh; Sun Kian Ip Group, headquartered in Macau, it is preparing to invest $2.7 billion to build a 133-story Twin Tower World Trade Center, which will become a global One of the tallest buildings.
In May of this year, a vice president of marketing for a local real estate developer in Hainan told the Curiosity Daily that he “had seen Hainan more than a decade ago” in Cambodia, and he wanted to replicate Hainan’s success there. The company he worked for had several plots in Cambodia. After Hainan banned foreigners from buying houses on April 22 this year, Cambodia became an exporter. They increased the development of a local area of more than 1,000 mu, and also reported several projects. , ready to start construction.
“Historically, China’s investment in Cambodia is mainly concentrated on infrastructure,” Ross Wheble told The New York Times in January. “It’s just that in the past 18 months, we’ve started to see many Chinese developers. And the arrival of individual investors."
According to what the New York Times saw in Phnom Penh at the time, Chinese character advertisement were increasingly appearing on the new Phnom Penh site. A real estate sales manager named Casa Meridian told them that "people from the mainland of China are very rich, especially people from Shanghai . They don’t need loans, they pay in cash.”

Property investment foreign capital3.638 Billion are from Southwest in a year, 55% is from China

Chinese buyers and developer is running business in Southwest, include Cambodia.

According to data compiled by the global Chinese real estate platform, foreign residents last year invested $119.7 billion in overseas home ownership (a comparable US$107.7 billion), an increase of about 18% (comparable to 6.2%), of which residential projects are about There are $65.9 billion.

Although the United States, Hong Kong, and Australia are the most popular overseas destinations for Chinese investors, the rankings have remained basically unchanged from the previous year, but Thailand, Vietnam, Malaysia, the Philippines, Singapore and other countries have become or are becoming the most interested markets in China.

Similar to the situation of foreign capital inflows absorbed by Cambodia, Chinese capital has flowed more into the real estate sector in Southeast Asia. At present, Japan is still the largest investor in Southeast Asia, and 20% of FDI in Southeast Asia is from Japan ($23 billion), and most of the investment goes to manufacturing. China's FDI traffic accounted for 14%. The share of FDI in Southeast Asia increased from 14% and 7% in 2011 to the current level.
In 2015, all Southeast Asian countries received US$3.119 billion in FDI, and China accounted for US$1.91 billion.In 2016, China accounted for US$2.22 billion of foreign-invested real estate investment of US$3.638 billion in ASEAN countries. Last year, buyers from the mainland, Taiwan and Hong Kong accounted for 25% of total foreign buyers in Southeast Asian countries, up from 21% in 2016. According to the number of enquiries, Thailand's ranking in the list of most popular home buyers in 2017 rose from sixth to third. At the same time, Malaysia’s ranking has also risen six places and is currently ranked ninth.

The enquiry volume is the buyer's purchase consultation on the foreign network to learn about the real estate of a certain country by means of e-mail, WeChat, etc. The volume of inquiries is not the volume of the transaction, but its change has been shown to be related to the volume of the transaction.

CB Richard Ellis's statistics show that in 2017, China accounted for 46% of foreigners buying in Thailand, far ahead of the second-ranking British and French. The house price index of single-family houses, condominiums and urban apartments in Thailand has been rising in recent years. As of the end of August this year, these house price indices have risen by 9%-14% compared with 2015.
The foreign network told Curious Daily that the middle-class buyers in China are the key drivers behind the rapid growth of investment in Southeast A។sia in 2017. For buyers with less assets, the properties in the Southeast Asian market are more practical. The price is also relatively low. The advantages of the Southeast Asian real estate market are particularly significant compared to the higher-priced real estate markets in Australia, Canada or the US cities and coastal areas. This also makes them more popular with Chinese buyers.
However, China's increasingly stringent foreign exchange controls, as well as the deleveraging pressure of real estate companies themselves, may put cold water on the booming Southeast Asian real estate market. In Cambodia, China Great Wall Engineering Company terminated a $2.7 billion property development project out of “serious uncontrollable risks”. Some apartment owners who have been renting a house for foreigners have already cut prices by 40% this year. Developers are starting to build smaller, cheaper projects or shifting the use of existing projects. (Source: Juwaiwang)

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