The gold rush however, has not come without its victims and real estate development has seen many ordinary Khmers evicted from their homes. Tourism has been another key driver of the Cambodian boom and this looks set to continue in the coming years with the weak US dollar, the de facto currency in Cambodia, helping to keep prices low.

US property services firm CB Richard Ellis is set to open a Phnom Penh office in the coming months and the mooted tapping of off-shore oil and gas by 2010 is making Cambodia and Phnom Penh an extremely attractive option for investors.

The government has also been contributing to growth not least by the announcement of a master plan for the city's development. Along with socio-economic development and improvement of physical infrastructure, the government has pledged to overhaul public services and housing while preserving the environment of the city and its environs. The Bureau of Urban Affairs of Phnom Penh Municipality is aiming to expand the city and build major new infrastructures by 2020 in order to accommodate Phnom Penh's growing economic activities and population. The Phnom Penh area will be broadened north, south, east and west, with Wat Phnom as the central point and city limits forming a radius of 30 km. The area opposite Chaktomukh River will be developed as an economic and residential centre while a number of urban zones will become Phnom Penh affiliated towns. Necessary infrastructure to be built includes roads, boulevards, canals and a railway system to link the city's growing and dispersed areas, according to The Cambodian Press Review. The Phnom Penh 2020 plan has already been approved by the Ministry of Land Management and now it needs to be ratified by the government.

There are however, signs that things are beginning to overheat. Annual price inflation spiked to more than 9 per cent in the last year, almost double its level in the preceding five years. The city's infrastructure is also struggling to keep pace with the rapid pace of development traffic, leaking sewers, floods and power blackouts are still the norm. The lack of transparency in business transactions has also proved a turn off for many international firms. There are indications too that the international downturn is beginning to bite and 2008 purchases are reportedly down significantly.

Condos in Phnom Penh
There are a huge range of very competitively priced apartments in the Cambodian capital. However, the high end of the market is currently dominated by the Gold Tower 42, a $US300 million South Korean apartment block which, at 42 storeys, will be three times higher than Phnom Penh's current tallest building. The completion date has been chalked in for 2012 but buyers are already purchasing many of the development's 360 units. More on buying condos in Phnom Penh .

Houses and land in Phnom Penh
Land prices have been spiraling rapidly upwards in Phnom Penh over recent years. Figures suggest prime Phnom Penh land has risen to $US3,000 per sqm compared to less than $US500 in 2000. However, the global downturn is being blamed for a sudden downturn in property purchases. Sales in Cambodia's commercial and residential property markets have plummeted as much as 50 percent this year, developers have reported. More on buying houses and land in Phnom Penh .

Renovating
Phnom Penh is dotted with architecturally important French colonial style buildings and these have become subject to the attentions of a number of overseas property buyers. Unlike the rest of the country where buyers have leaned towards arranging the refurbishment of one-off buildings for their own use or for single resale, a number of companies in Phnom Penh are currently selling apartment units developed from larger, renovated buildings. Overseas property investment company David Stanley Redfern Ltd has, for example, a number of 1-2 bedroom units in the French Quarter of Phnom Penh currently on the on the market staring from $52,000.

Units in the riverside development include a two-year guarantee of a 10 per cent minimum return, while Cambodia's current capital growth looks likely to ensure in the region of 15-20 per cent net in rental return. Units can be secured for ?1000 (61,000 Baht) with nothing to pay until completion beyond an initial post-due diligence payment of 35 per cent.

Top tips for Phnom Penh property
Guide to buying condos in Phnom Penh
Guide to buying houses and land in Phnom Penh

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