The property market in Siem Reap is witnessing a significant shift as buyers are increasingly opting to build their own homes rather than purchasing completed houses. This trend has sparked confidence among industry experts who believe that there is untapped potential in the residential land sector.
David Granger, the Branch Manager of IPS Siem Reap, is among the experts closely monitoring the shifting dynamics in the Siem Reap property market. He stated that a notable transition in buyers’ behavior was observed during the pandemic. “Since the Covid-19 pandemic started, foreign buyers seem to have moved from wanting to buy completed homes to buying land to build their own homes,” Granger said.
But prior to Covid-19, “large number of transactions relating to the sale of vacant land were observed for property speculation while transactions relating to the sale of houses were mostly for vacation and residential rentals to accommodate locals and foreigners relocating to Siem Reap,” he added.
Today, there are fewer of these transactions. “The property market in Siem Reap has definitely cooled down,” as Granger described. “Buyers have only been focusing on distressed property sales and land being sold at under market prices now.” Despite these challenges, the current situation has sparked a shift towards new and promising opportunities. With local and foreign buyers still relocating to Siem Reap, it looks promisingly as though that is where the property market is headed.
Granger elaborates that “some of these buyers are relocating from other countries to Cambodia, and Siem Reap is their preferred destination due to the attractive lifestyle here. Other buyers are locals and foreigners living in Phnom Penh and are seeking to relocate to Siem Reap to escape the increasing traffic, pollution, and other issues associated with over-urbanisation of the city.”
These buyers seem to have accelerated activity in the land sector in Siem Reap since “more discerning buyers are choosing to purchase their own land and build their own homes.” And the impact is not just taking effect on the housing market; more importantly, it’s reshaping how buyers think about housing.
Granger cited various reasons why buyers are choosing to build rather than buy homes, starting with financial reasons as it saves between 30%–40% of the purchase price. He further explained that “the supply of quality-built Western-style homes in Siem Reap is limited, so the markup on completed homes by sellers ranges from $100k to $250k.” This disparity in pricing between completed homes and building costs incentivizes buyers to take a more hands-on approach and build their dream homes instead.
It is also worth noting that the popularity of Siem Reap has only been “relatively recent,” so land prices in this region are still considerably lower compared to other urban cities in Cambodia. Granger illustrated this point by citing that with a budget of $150,000, buyers can only secure around 50 square meters of land within 10 kilometers of Phnom Penh city center. However, in Siem Reap, the same investment can purchase approximately 1,500 square meters of land within a 5-kilometer radius of the city center.
Other reasons, perhaps why people are leaning towards the idea of building their own home, is it is somehow liberating. Buyers have the freedom to incorporate quality workmanship and materials, resulting in a home that is not only fully-functional but also highly valued in case of future resale.
Another motivating factor for buyers is the desire for a tailor-made living that suits their specific needs and preferences. Granger explained that “many homes on the market will mostly suit a buyer’s needs but rarely are they perfectly tailored for that buyer.” Still, building their own home offers the ‘freedom’ to “satisfy all the needs and tastes of the people that will inhabit the space.”
All these reasons, alongside the abundant availability of low-priced lands and the various living advantages of Siem Reap, offer a remarkable opportunity for buyers seeking to purchase land and build homes.
Granger highlighted some advantages, describing Siem Reap as a place that exudes “a more relaxed and gentler atmosphere compared to larger cities in Cambodia.” Notably, Siem Reap is also renowned for being home to the UNESCO’s Heritage-listed Angkor Wat temple, drawing thousands of visitors from around the world. It also embraces a green living and low-rise urban landscape, “which further adds to the livability of the city,” he added.
As for choosing a home location in Siem Reap, Granger said “any suburb within a 5km radius of the city center, including Sala Kamreuk, Svay Dangkum, and Svay Prey.”
The process of building a home in Siem Reap can also become a seamless task when one chooses to work with a real estate agency in Cambodia that has wide services and networks like IPS. Granger emphasized that “IPS takes on the crucial tasks that buyers should undertake before purchasing land, including conducting due diligence and checking various aspects of the land, such as ownership, site location, precise borders, surrounding development, as well as any legal issues, loans, or tax debts associated with the property.”
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Beyond land ownership, “IPS is also able to recommend both architects and building contractors that have proven track records of designing and building homes and other projects in Siem Reap.”
KH