Each type of property buyer has a unique set of considerations before deciding whether to buy during a property boom. With that in mind, Realestate.com.kh wants to advise each type of property buyer, respectively.
The first-time home buyer:
First-time home buyers are generally the most price-sensitive type of buyer, because they may not have any equity (current properties) to use for a mortgage on their next property investment. Therefore, they are usually dependent on only their deposit savings to buy a new property.
First-time home buyers have likely delayed their purchase, hoping that the market is going to adjust – downwards. Unfortunately, though, in a property boom, delaying a purchase on a rising market often only costs the first-time home buyer more in the long run – as the average property prices don’t stop rising.
A “change of scenery” buyer:
In general, most people moving will choose another property in their local area. However, many people look to escape the congestion of urban areas as they begin to grow up – in search of a quieter life on the outskirts of the city, suburbs, by the beach, near a forest or on a farm.
Making a successful lifestyle-change property purchase will depend on how familiar you are with that new market, as well as the state of the property market in which you are selling your current property.
Strong selling conditions in central Phnom Penh, for example, or the extremely well-valued Chamkarmon district mean it’s the perfect time to sell for those considering a lifestyle change property – and wanting to move to a location outside the central city.
For example, trade in your high-valued villa property in BKK1, for a Borey home along Chea Sophara Road. Usually, prices are lower in areas outside the city, so selling in the city and moving to the country right now, during the property boom, means your purchasing power will be maximised.
You should be able to get a bigger and better property with more privacy, and be near mortgage-free – because you current home’s sale should cover purchase fees. No mortgage would also improve your lifestyle, remember – but you might be trading this pressure for a slightly longer commute to work.
The “downsizing” buyer:
The downsizer, those people looking for a smaller, cheaper home, is often in the best position to buy their next home during a property boom. The chief example of a downsizer is the retiree. Like a property up-grader, they tend to be selling at the same time as they are buying. However, the downsizer is lucky that their new home tends to be worth less than the one they are buying. Strong demand in a boom market will assist this type of property buyer because it means a maximum sale price is available. Thus, retirees and other downsizers are more likely to be in a position to put some money in the bank and buy a less expensive property.
The “property investor”:
Every property investor needs to ensure the money-return is sufficient before taking the plunge into even the strongest market. In a rapidly rising market such as Cambodia, that means keeping a strong head and not getting caught up in the boom fever.
One of the main factors influencing your decision will be whether you will also be selling in a booming market, since capitalising on demand for your existing property will boost the cash you have available to fund your next purchase.
Read more about how to approach your property investment decisions on Realestate.com.kh today!