As the Cambodian property market continues to expand, adding more high-rise condominiums to an ever-developing skyline, the construction sector has become a backbone of the Kingdom’s economy that attracts investment from across the region.

But as the ASEAN integration opens up at the end of this year, with the promise of deeper market integration, the race to attract foreign investors to individual markets appears to be accelerating.

For example, this month, two Vietnamese laws will take effect in a bid that could shake up the regional competition.

One of the laws allows foreigners to fully own houses and apartments, while the other is geared towards large investors who wish to lease houses, and land and develop residential and non-residential property.

According to Huynh Dai Thang, country partner of DFDL Vietnam, the anticipation for the law has already placed Vietnam higher on the investment radar.

“As a matter of fact, the interest of foreigners in ownership of properties in Vietnam has increased recently,” he said.

The new laws allow for increased flexibility that seeks to draw in more investors for new development projects and also fill vacancies in the countries’ apartment buildings with additional transparency.

“[The laws] have not only expanded the scope of activities in which foreign invested [real estate] developers can carry out in Vietnam, but they also diversify the foreign ownership of properties in Vietnam by foreign individuals and foreign entities,” he said in an email.

Yet, in order for Vietnam to rapidly attract new investors, he explained that the government has to streamline the ability to obtain ownership certificates or “the purchase of properties by foreigners would unlikely increase drastically as expected at least for the coming months.”

While some analysts worry that these laws could shake up Cambodia’s market, especially as Indonesia is debating similar legislation, Rami Sharaf, CEO of WorldBridge International Group, doesn’t foresee it having an impact on the Kingdom’s property sector.

To him, the potential that Cambodia offers within ASEAN outweighs regional competition.

“The major attraction for foreign investors considering buying property in an ASEAN country is Cambodia’s steady economic growth; phenomenally steady growth: 7.5 per cent average for the last 5 years, year on year. This puts Cambodia as the number 21 worldwide in growth, and number 1 in the region,” he wrote in an email.

Although Cambodian law effectively prevents foreigners from becoming landowners by not allowing for them to purchase property on the ground floor, Sharaf sees this as hardly an impediment.

Although he acknowledged that these Vietnamese reforms are undoubtedly beneficial, he said:

“No investor is saying now, ‘I cannot own a property in Cambodia, so I will not come to Cambodia.’ Quite the opposite. If they can’t own the land, they can rent the land. If it is not an outright purchase, there is a concession: such as long-term leases of 70 and sometimes 90 years in Cambodia.”

While countries compete for foreign direct investment (FDI), of which property development is inextricably linked, Sharaf said that Cambodia would retain its attractiveness despite direct foreign ownership even outside of property sphere.

“There are various solutions in the Cambodian real estate market that are unique, and ensure the country remains an extremely attractive regional FDI destination. The matter of property ownership remains a secondary consideration for FDI in Cambodia – because, quite simply, where there is a will, there is always a way for FDI in Cambodia,” he said.

“The same cannot be confidently said for Vietnam or Indonesia. By constitution, Cambodia is an open and free economy. It is, and it always will be – because it is written in the constitution.”