Authored by the expert who managed and guided the team behind the Cambodia Property Pack
Everything you need to know before buying real estate is included in our Cambodia Property Pack
Why is Cambodia emerging as a prime destination for property investment in 2025? Is it the impressive rental returns, the rapidly growing tourism sector, or the competitive pricing compared to other international markets? What makes it particularly appealing for investors?
We encounter these questions frequently because we are actively engaged with developers, real estate professionals, and investors like you. Given the heightened interest in this market, we've decided to compile our insights into a detailed article for everyone's benefit.
Our aim is to present a compelling case for investing in Cambodia's real estate market, supported by our direct experience and market expertise.
If you feel we've overlooked an important aspect or wish to learn more, please reach out (we respond very quickly). Your feedback enhances our content.
Finally, please remember that this is not financial or investment advice. Real estate investment involves inherent risks, and market conditions can change unexpectedly. We strongly recommend conducting thorough research and consulting with a qualified financial advisor before making any investment decisions.
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1) Cambodia’s open economy makes it easy for you to invest in real estate
Cambodia's open economy is a major draw for foreign direct investment in real estate.
In 2021, FDI in Cambodia's real estate sector saw a remarkable increase of 53%, reaching $3.4 billion, the highest since 2013. This upward trend is expected to continue, with projections for 2023 estimating FDI to grow to $4.6 billion. The Cambodian government has made it easier for foreigners to invest by allowing 100% foreign ownership under certain conditions. While direct land ownership is restricted, foreigners can still purchase real estate through Cambodian representatives or in special tourism zones.
Long-term leases and landholding companies offer viable alternatives for those looking to invest. The real estate and construction sectors are now crucial to Cambodia's economy, contributing about 15% as of early 2023. The government is also heavily investing in infrastructure projects like roads and airports, often funded by foreign investments, which further boosts the real estate market.
Foreign investors are confident, thanks to Cambodia's strategic location in Southeast Asia and its favorable tax policies. This confidence is evident in the increasing number of property transactions involving foreign buyers. Property values and rental yields are rising in key cities, making it an attractive market for investors.
Sources: Foreign Direct Investment in Cambodia's Real Estate Market, New Cambodian policies aimed at foreign real estate investment, CBRE's 'Fearless Forecast 2024' Navigates Challenges And Opportunities in Cambodia's Real Estate Market
2) You’ll find everything from luxury condos to affordable homes in this country
Cambodia's real estate market is diverse, offering everything from luxury condos to budget-friendly homes.
In bustling cities like Phnom Penh and Sihanoukville, there's a noticeable trend towards upscale living. Over 970 new luxury condo units were launched in 2024, with prices around USD 2,714 per square meter. This shows a strong demand for high-end properties, attracting both locals and expats who enjoy the vibrant city life and modern amenities.
Meanwhile, the affordable housing sector is also booming. Phnom Penh added over 4,196 affordable housing units in the first half of 2024, thanks to 16 new projects. This represents a 9% increase from the previous year, making it easier for families and young professionals to find homes that fit their budgets.
The Cambodian government is actively encouraging this growth by offering tax incentives. These include reduced corporate income tax rates and duty-free import of materials, which make it attractive for developers to invest in various property types. This strategy not only diversifies the market but also boosts the economy by drawing in foreign investors.
For those considering a move to Cambodia, the variety in property options is a major draw. Whether you're looking for a sleek city condo or a more affordable suburban home, the market caters to a wide range of preferences and budgets. This flexibility is a key factor in the country's growing appeal as a real estate destination.
Sources: Cambodia Investment Review, IPS Cambodia, Construction & Property
We have made this infographic to give you a quick and clear snapshot of the property market in Cambodia. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
3) Phnom Penh's rapid urbanization increases demand for residential properties
Phnom Penh is rapidly urbanizing, driving up the demand for homes.
In just a year, the city's population jumped by over 71,000, now topping 2.3 million. This isn't just a blip; experts predict Phnom Penh could swell to over 3.2 million by 2035. People are flocking to the city, chasing better jobs and living conditions, which naturally cranks up the need for more housing.
Across Cambodia, there's a noticeable shift from rural to urban life. By 2030, the urban population is expected to rise from 24.2% to 30.6%. This migration is largely about seeking economic opportunities that are more abundant in cities like Phnom Penh.
The real estate scene in Cambodia is buzzing, with a surge in residential construction permits. This boom is not just about local demand; foreign investors are also eyeing the market, drawn by Cambodia's appealing economic climate. Compared to its neighbors, Cambodia offers relatively low property prices, making it a hot spot for real estate development.
For those considering buying property, Phnom Penh's growth offers a promising opportunity. The city's expansion is fueled by both local and international interest, creating a dynamic market. Investors find the low property prices attractive, and the city's ongoing development suggests potential for future gains.
As Phnom Penh continues to grow, the demand for residential properties is expected to keep rising. This trend is a clear indicator of the city's evolving landscape, making it an exciting time for potential buyers. Urbanization is reshaping the city, offering new opportunities for those looking to invest in real estate.
Sources: World Population Review, IPS Cambodia, Koh Rong Property
4) In Cambodia, you’ll find more mortgage options as the banking sector grows
The banking sector in Cambodia is expanding, offering more mortgage options than ever before.
With 36 commercial banks and a host of microfinance institutions now in operation, the variety of mortgage products available has grown significantly. This means more choices for potential homeowners, whether you're looking for a conventional loan or something more tailored to your needs.
For first-time buyers and those with lower incomes, the landscape is becoming more accessible. The introduction of various home loan types has made it easier to find affordable housing. In fact, there's been a 5% rise in consumer loan applications in the last quarter of 2023, showing a strong demand for mortgages.
Interest rates are competitive, with options like Adjustable Rate Mortgages providing flexibility. This aligns well with Cambodia's dynamic real estate market, where government policies are encouraging foreign investment. Such policies have opened the doors to international investors, adding more fuel to the market's growth.
For those considering a property purchase, it's worth noting that the banking sector's expansion is not just about more options but also about better ones. The increased competition among banks means they are keen to offer attractive terms to win your business.
Sources: Cambodia Investment Review, ADA Cambodia, Khmer Times, RFA
5) In Cambodia, you’ll benefit from tax incentives as a foreign real estate investor
The Cambodian government is making it easier for foreign investors to dive into the real estate market with favorable tax incentives.
One of the key perks is a stamp duty tax exemption for properties in gated communities valued at $70,000 or less, which will last until the end of 2025. This means if you're eyeing a cozy spot in a gated community, you could save quite a bit on taxes.
For those looking at properties over $70,000, there's a sweet deal too. You can deduct $70,000 from the stamp duty tax base, making it more appealing to invest in registered housing development projects. This is a clever move by the government to attract more foreign buyers.
But that's not all. The incentives also cover capital gains tax relief and exemptions for unused land areas under five hectares. This is particularly enticing for those considering larger investments or planning to develop land in the future.
These tax breaks have sparked a surge in foreign direct investment, with the real estate market seeing a jump from $1.5 billion in 2021 to a projected $4.6 billion in 2023. This influx of cash is not just boosting the economy but also driving infrastructure development and increasing foreign property ownership.
With these incentives, Cambodia is positioning itself as a hot spot for real estate investment, offering a blend of economic growth and attractive opportunities for foreign investors.
Sources: B2B Cambodia, IPS Cambodia, Rajah & Tann Asia
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6) With tourism growing, you can easily rent out your property short-term
The tourism industry in Cambodia is booming, with international tourist arrivals skyrocketing by 139.5% in 2023 compared to the previous year.
In August 2024, the trend continued with an 18.1% increase in international visitors compared to the same month in 2023. This surge is not just numbers; it's a sign of Cambodia's growing appeal as a travel destination.
With more tourists, hotels and guesthouses are seeing higher occupancy rates. During the 2023 Q4 holiday season, these rates ranged from 33% to 40%, showing a clear demand for more places to stay.
Beyond traditional hotels, the homestay and vacation rental market is thriving. By 2024, this sector was expected to generate over $59.3 million in revenue, driven by tourists seeking unique, local experiences.
Tourists are increasingly interested in immersive stays, preferring homestays that offer a taste of local life over standard hotel rooms. This shift is reshaping the accommodation landscape in Cambodia.
For potential property buyers, this means opportunities in short-term rentals are expanding, making it a promising time to invest in the Cambodian real estate market.
Sources: Phnom Penh Post, Knight Frank, Khmer Times
8) Foreigners will find it easier to own property as the legal framework improves
In Cambodia, foreigners are finding it easier to own property thanks to recent legal improvements.
Back in 2009, Cambodia introduced Sub Decree 126, which was a game-changer for foreign buyers. This law allows foreigners to own private units in co-owned buildings, known as Strata Title. For over 15 years, foreign nationals have had clear rights to buy condos in Cambodia, making it a popular choice for international investors.
Recently, there's been a noticeable uptick in foreign investment in Cambodia's real estate. The market is buzzing with activity, and projections suggest that foreign direct investment could hit $4.6 billion in 2023. This surge is a testament to the growing confidence among foreign investors, who are encouraged by the government's welcoming stance.
Prime Minister Hun Manet is actively rolling out policies to attract more foreign real estate investment. These include allowing foreigners to use Cambodian representatives for property purchases and facilitating buying through special tourism zones or trust companies. Such initiatives are designed to make the buying process smoother and more accessible for international investors.
These changes are part of a broader effort to boost the economy and make Cambodia a more attractive destination for foreign capital. The government is keen on creating a friendly environment for investors, which is evident in the steady rise of foreign participation in the real estate sector.
Sources: IPS Cambodia, IPS Cambodia, RFA
We made this infographic to show you how property prices in Cambodia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
9) Cambodia’s location in Southeast Asia makes it a hotspot for international businesses and expats
Cambodia's prime spot in Southeast Asia is drawing in international businesses and expats like never before.
In the past couple of years, Foreign Direct Investment (FDI) in Cambodia has surged, thanks to its strategic location and investor-friendly policies. This trend is set to continue, with the country expected to lead Southeast Asia with a 6.1% growth rate in 2024, highlighting its robust economic potential.
Phnom Penh, the bustling capital, is now a magnet for multinational companies. Improved infrastructure and airport facilities have made it a convenient hub. The introduction of online entry card processing has simplified access for investors, enhancing its appeal. Cambodia's involvement in the Belt and Road Initiative has further boosted its connectivity, making it a hot spot for international trade.
The Cambodian government has rolled out the red carpet for foreign investors. With no foreign exchange controls and open investment policies, investors can move their capital freely and securely. Special economic zones with tax incentives and streamlined regulations are also in place, attracting businesses eager to set up regional offices.
Sources: Cambodia Investment Review, International Living
10) New infrastructure projects, such as roads and airports, boost property values
Infrastructure projects like new roads and airports can significantly boost property values.
When new infrastructure is built, it often means better connectivity and easier access, making areas more appealing for both living and business. Take Cambodia, for example, where major projects in roads, rail, ports, and airports are enhancing property values by improving how easily people can get around. In places like Toul Kork, land prices have jumped from $1,800 to $6,000 per square meter as the area becomes a hot spot for investment.
This isn't just happening in Cambodia. In Singapore, similar infrastructure projects have led to a noticeable rise in property values. The Cambodian government is also backing this trend, having approved fixed-asset investment projects worth KHR9.2 trillion in early 2024, which is expected to further boost property values.
Real estate experts point out that big infrastructure projects, like new airports and ports, are creating investment and construction opportunities, which in turn drive up property values. The upcoming Techo Takhmao International Airport, for instance, is set to handle millions of passengers, suggesting a significant increase in property values nearby.
Media reports also highlight property booms linked to new infrastructure, such as the expansion of the Sihanoukville Autonomous Port. This project aims to ease congestion and is expected to boost property values in the area.
Sources: Cambodian Infrastructure Report, Realestate.com.kh, Market Research Cambodia
11) With government investment in tech, Cambodia’s internet and communication infrastructure is improving
The Cambodian government is making big moves in technology and internet infrastructure.
One standout project is the $165-million Hong Kong-Phnom Penh submarine fiber optic cable, completed in 2024, which has transformed the country's internet landscape. This upgrade means faster and cheaper internet for everyone, from bustling cities to remote villages. With over 17 million SIM internet users and more than 310,000 fixed internet users, Cambodia is more connected than ever.
These improvements are not just about faster browsing; they are opening doors for businesses and individuals alike. The rise in internet penetration is a game-changer, especially for tech startups and digital businesses that are popping up across the country. This connectivity is crucial for entrepreneurs looking to tap into the digital economy.
But the government isn't doing this alone. They're teaming up with tech companies and sectors like the Ministry of Agriculture, Forestry, and Fisheries. These partnerships are all about building a robust digital infrastructure that supports innovation and growth. It's a collaborative effort to ensure that Cambodia is ready for the digital age.
For those considering buying property in Cambodia, this tech boom is a promising sign. A well-connected country means more opportunities for business and personal growth. Whether you're looking to invest in a startup or simply enjoy a seamless online experience, Cambodia's digital transformation is paving the way.
Sources: The Better Cambodia, Cambodia eSIM, Nucamp Blog
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12) With a young and growing population, there’s a rising demand for housing
Cambodia's young and growing population is fueling a surge in housing demand.
With a population growth rate of 1.2832% in 2023, more people are entering the housing market, eager to rent or buy homes. A large chunk of Cambodia's population is under 30, thanks to past high fertility rates. Even though the number of children per woman is dropping, many women are still in their reproductive years, leading to a high birth rate and more young families needing homes.
Urbanization is another big factor. In 2022, about 25% of Cambodians lived in urban areas, and this number is climbing. As more people flock to cities, the demand for urban housing rises, pushing the market to expand and meet these needs.
Young families are forming rapidly, and they need places to live. This demographic shift is creating a vibrant housing market, especially in urban areas where opportunities are abundant. The influx of young people into cities is not just about finding a place to live; it's about seeking better jobs and lifestyles, which in turn fuels the housing demand.
As cities grow, the pressure on the housing market intensifies. Developers are racing to build more homes to accommodate the influx of new residents. This trend is reshaping the urban landscape, with new housing projects popping up to cater to the needs of a younger, dynamic population.
Sources: Trading Economics, Statistical Bureau of Japan, United Nations Cambodia
13) A young workforce drives economic growth and boosts housing demand in the country
Cambodia's young workforce is a key driver of economic growth and housing demand.
With a large portion of the population under 30, Cambodia boasts a vibrant and dynamic labor market. This youthful energy is evident in the growing number of young people enrolling in higher education and vocational training programs. These programs have expanded significantly, equipping the youth with skills that match the job market's needs.
In 2023, the youth unemployment rate was impressively low at 2.1%, showing that young adults are finding jobs. The government has been actively promoting technical and vocational education and training (TVET) to ensure that young people are job-ready. This focus on education has kept employment rates high, with many young Cambodians even choosing self-employment.
Industries like manufacturing and tourism are booming, attracting young professionals and boosting economic growth. As these sectors expand, they create more job opportunities, drawing young people to urban areas. This urban shift, along with rising disposable incomes, is driving the demand for modern housing and amenities.
Young Cambodians are eager to own homes, which further stimulates the housing market. This aspiration is supported by potential government policies aimed at first-time homebuyers. The combination of a young workforce and supportive policies makes Cambodia an attractive place for property investment.
Sources: ADB, Skills for Employment, ADB News
14) The country’s great climate makes it perfect for living and tourism all year round
Cambodia's warm climate makes it perfect for living and tourism all year round.
With an average temperature of 27.41°C, Cambodia offers a consistently warm and inviting atmosphere. This tropical monsoon climate is a magnet for tourists looking for a sunny escape, whether it's winter or summer back home.
One of the perks of Cambodia's climate is its low incidence of extreme weather. While experts predict more extreme weather in the future, the current climate remains stable, making it a safe bet for those who want to avoid weather surprises during their travels.
Tourism in Cambodia is booming, with a 139.5% increase in international visitors in 2023 compared to the previous year. This surge brought in 5.45 million tourists, showing that more people are discovering the charm of Cambodia.
These numbers reflect a strong recovery and growing interest in the country as a top tourist destination. The stable climate and warm temperatures are key factors in this trend, drawing visitors from all over the world.
Sources: World Bank Climate Knowledge Portal, Phnom Penh Post
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Cambodia. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
15) Cambodia offers a stable currency, making it a reliable choice for investors
The Cambodian riel is remarkably stable, making it a reliable choice for investors.
In 2023, the riel's exchange rate against the US dollar barely budged, with a tiny dip of just 0.2% from the previous year. This steadiness is thanks to the National Bank of Cambodia, which actively manages the currency by selling US dollars and absorbing riel to keep things balanced.
Inflation in Cambodia is also under control, with a low rate of 2.1% in 2023. It's expected to hover around 2.0% to 2.3% in the coming years. This is partly because global fuel prices have been stable, which helps keep overall costs in check.
Big financial players like the IMF and the Asian Development Bank are on the same page, predicting that Cambodia's inflation will stay steady, much like other parts of Asia. This consistency in inflation rates is a big plus for the riel, offering a predictable environment for investors.
The Cambodian government is also doing its part to keep the currency stable. The National Bank of Cambodia is working on a policy rate to guide market interest rates and encourage the use of the riel. Plus, the government is focusing on fiscal consolidation to boost revenue collection, which strengthens the country's financial position.
Sources: NBC Annual Report 2023, Khmer Times, Asian Development Bank
16) With improved political stability, Cambodia is now more attractive to investors
Cambodia's political scene is looking brighter, and that's catching the eye of investors.
In 2023, the political stability index nudged up to 0.04 points from a previous -0.1 in 2022, according to The World Bank. This shift is a clear sign of a more favorable political climate.
What's more, Cambodia's rank for political stability and absence of violence/terrorism hit 47.87% in 2023. This jump in global rankings shows Cambodia is climbing the ladder, making it a more secure spot for investors.
On the tourism front, things are looking up too. By 2024, international arrivals are bouncing back to pre-pandemic numbers. This surge, thanks to the "Cambodia: Safe and Green" campaign, is a testament to the country's growing allure as a stable and inviting place for both tourists and investors.
Investors are taking note of these positive changes, seeing Cambodia as a promising place to put their money. The improved political stability and thriving tourism sector are key factors driving this newfound confidence.
With these developments, Cambodia is positioning itself as a more attractive destination for international business and investment. The country's efforts to enhance its political and economic landscape are paying off, drawing interest from around the globe.
Sources: The Global Economy, Trading Economics, US-ASEAN
17) With better schools, Cambodia is becoming a popular choice for families looking to settle long-term
Cambodia's education sector is on the rise, making it a great spot for families thinking about a long-term move.
One big reason is the impressive jump in primary school enrollment, hitting 95.8% in 2022-2023. This bounce back from pandemic setbacks shows a strong push to get kids into classrooms.
The government is also pouring money into education infrastructure, leading to more schools popping up nationwide. In the 2021-2022 school year, there were 1,812 public and 323 private secondary schools, making it easier for families to find the right fit for their kids.
International partnerships are adding extra value. Take Purdue University, for example, which renewed a five-year deal with the Royal University of Phnom Penh. This includes student and faculty exchanges, bringing a global touch to local education.
Teacher training is another area seeing big improvements. The government is boosting teacher pay and training, which is leading to better educational outcomes. This is part of a larger plan to focus on teachers and governance, ensuring students get a quality education.
These changes are making Cambodia's education system more appealing, especially for families looking to settle down. With better schools and teaching, the country is becoming a more attractive option for long-term living.
Sources: CEFCambodia, Purdue University, Phnom Penh Post
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18) With a low cost of living, Cambodia is ideal for retirees and long-term residents
The cost of living in Cambodia is significantly lower than in many Western countries, making it a great choice for retirees and long-term residents.
Imagine paying rent that's 64% less than in the United States. In Cambodia, a one-bedroom apartment in the city center costs about $405.11, compared to $1,359.43 in the U.S. This means more money in your pocket for other things.
When it comes to daily expenses, consumer prices are 34% lower than in the U.S. This includes everything from food to utilities and entertainment. You can enjoy dining out and grocery shopping without worrying about overspending, making life more enjoyable and less stressful.
Utility costs are another area where you save. Lower utility bills mean you can keep your home comfortable without the high costs you might expect elsewhere. This adds to the overall affordability of living in Cambodia.
Getting around is easy on the wallet too. Transportation costs are relatively low, which, along with affordable housing and consumer goods, makes Cambodia a top pick for retirees. You can explore the country without breaking the bank.
The Cambodian government makes it easy for foreigners to stay long-term. They offer visa extensions that simplify the process for retirees and long-term visitors, making settling in the country a breeze.
Sources: SmartAsset, Expatistan
While this article provides thoughtful analysis and insights based on credible and carefully selected sources, it is not, and should never be considered, financial advice. We put significant effort into researching, aggregating, and analyzing data to present you with an informed perspective. However, every analysis reflects subjective choices, such as the selection of sources and methodologies, and no single piece can encompass the full complexity of the market. Always conduct your own research, seek professional advice, and make decisions based on your own judgment. Any financial risks or losses remain your responsibility.