The New Frontiers of Housing Financialization in Phnom Penh, Cambodia: The Condominium Boom and the Foreignization of Housing Markets in the Global South

ABSTRACT

This article investigates housing financialization processes in low-income countries (LICs). Considering housing as both capital and commodity, the article excavates the roots of housing financialization in LICs since the 1960s, and shows how financialization has been used, since the 1990s, to circumvent long-standing obstacles to the marketization and commodification of LICs’ housing markets. Focusing on the recent development of the condominium market in Phnom Penh, the capital city of Cambodia, the article then investigates the role of various stakeholders (e.g., development agencies, public institutions, foreign and international investors, transnational developers, brokers) in the contemporary financialization of local housing markets. Detailing their strategies, discourses, and actions, I argue that in economic contexts where the financial sector remains underdeveloped, local and international developers and brokers act as agents of financialization by creating specific channels of real estate capital circulation and landing. I argue that the case of Phnom Penh reveals how foreign and transnational stakeholders, mainly originating from Asia, have created a specific regime of capital accumulation through housing financialization, which I name the foreignization of housing markets. This regime emphasizes the significant capacity of financialization to penetrate markets that have long remained out of its reach by establishing capital extraversion mechanisms.

KEYWORDS:

• financialization
• housing
• Global South
• real estate
• condominium
• Cambodia

Acknowledgments

I would like to thank Manuel Aalbers, Marieke Krijnen, and Raquel Rolnik for their useful feedback on the first version of this article. I'm also grateful to Sebastien Rioux, who helped deepen some of the ideas developed here. Finally, I would like to thank the three anonymous reviewers for their useful critiques and comments on earlier drafts.

Disclosure Statement

No potential conflict of interest was reported by the author.

Notes

1. The term frontier market was coined in the 1990s by the International Finance Corporation, a subsidiary of the World Bank group (WB), to designate the new, promising investment markets outside developed economies.

As an international real estate agent company recently wrote, “Africa is undoubtedly the biggest opportunity for real-estate development left in the world” (Savills, 2018, p. 41).

2. De Soto’s main argument is that the lack of formal property in many Global South countries represents a huge amount of dead capital. In this context, access to formal property (mainly through land registration and property titling) could represent a key form of leverage for economic development for poor households, notably through the use of formal property as collateral for loans. De Soto’s arguments, very much inspired by neoliberal theories, have been widely criticized for being too simplistic (see, e.g., Ferguson, 2006; Goldfinch, 2015).

3. The WB and the French government developed street-addressing projects in cities in more than 20 countries, mainly in sub-Saharan Africa, but also in Asia (Farvacque-Vitkovic, Godin, Leroux, Chavez, & Verdet, 2005).

4. For the NBC, accommodation means short-term rental for visitors and travelers, as well as the services that are offered to them for immediate consumption.

5. See, for instance, the website of the Cambodia Constructors Association (https://www.construction-property.com) or the announcement of the latest property expo in Phnom Penh (https://realestatekh.lpages.co/reakh-cambodia-home-lifestyle-expo-2019-attendee-en/).

6. Such as the radio show Let’s Talk Money (https://blogs.worldbank.org/eastasiapacific/lets-talk-money-new-campaign-helps-cambodia-new-generation-on-financial-management).

7. http://www.khmercapital.com.kh/en/service/condo-loan

8. https://www.propertyfactsheet.com/properties/the-peak-cambodia/

9. https://offshoreleaks.icij.org/nodes/80050021

10. http://en.jpztzdc.com/about/i = 20&comContentId = 20.html

Additional information

Funding

This work was supported by the Social Sciences and Humanities Research Council of Canada [430-2017-00229].

Notes on contributors

Gabriel Fauveaud

Gabriel Fauveaud is assistant professor in the Department of Geography and at the Center for Asian Studies at the University of Montreal. He holds a PhD in geography and urban studies from the Sorbonne University (2013). His current research explores the sociospatial and sociopolitical aspects of the production of urban spaces in Global South cities. He is particularly interested in real estate, transnationalism in urban planning, informal urban planning practices, and social movements related to spatial justice.