China is fueling a property boom in this Southeast Asian country

One of the fastest property booms in the world is happening in Cambodia, largely thanks to buyers and builders from China.

Phnom Penh, the country’s capital, is going through a rapid transformation, with high-rise condominiums replacing heritage sites, according to Bloomberg. However, with Cambodia’s median household income at just about $11,000 per year, sales and rentals have already started slowing down.

The city is an example of wealthy Chinese developers looking for foreign governments to offer up prime land for investment. Several of those bets have been suffering lately as governments that approved them get voted out, and the developments themselves lead to rising prices and resentment among locals.

The pipeline of projects backed by China does not appear to be slowing down in Cambodia, though, as Prime Minister Hun Sen maintains close ties with China and extended his 33-year reign in July after disbanding the main opposition party.

Mey Kalyan, senior adviser to the Supreme National Economic Council, told Bloomberg that the country was still concerned about relying on China too much.

“We must come up with strategies to manage this investment to avoid problems in the future,” he said. “We should not allow just one country to dominate investment.”

Average condo prices in the capital were $3,200 per square meter, and the supply of condos is expected to double to more than 20,000 units this year.

Projects include a $2.7 billion, 133-story Twin Tower World Trade Center and 24 high-rise buildings along the riverbank in Phnom Penh. The government also wants to build a new $80 billion capital north of Phnom Penh dubbed “Samdech Techo Dragon City.” [Bloomberg] – Eddie Small