Is buying a property in Daun Penh a good investment?

Last updated on December 20, 2023

Yes, the analysis of Phnom Penh's property market is included in our pack

If you've appreciated the historic landmarks and cultural richness of Daun Penh, you may have thought about calling this central part of Phnom Penh your home, reveling in its local heritage and vibrant atmosphere.

Is it a good idea though? What's the current state of the real estate market in that area? Are property values appreciating or depreciating? Are investors seeing returns on their real estate investments? How's the demand for rentals?

We'll answer all these questions for you! When building and updating our property pack for Cambodia, our team has been researching and surveying this area. In fact, there is significant customer interest in investing there. Therefore, we believe it would be beneficial to include some information about it in our property pack.

Why do property buyers like investing in Daun Penh?

Daun Penh, a central district in Phnom Penh, stands out as an attractive location for property buyers due to a blend of historical significance, strategic location, and vibrant urban life.

Its allure lies not just in the present-day amenities but also in its rich cultural tapestry, setting it apart from other real estate markets in Phnom Penh and beyond.

The uniqueness of Daun Penh begins with its historical and cultural richness. This area is home to some of Phnom Penh's most iconic landmarks, such as the Royal Palace and the National Museum.

These historical sites imbue the district with a unique character that you can't find in more modernized areas. This historical charm is a significant draw for those who appreciate a sense of history intertwined with their living spaces.

Moreover, Daun Penh's central location makes it a hub for business and leisure, which is a stark contrast to the more suburban or newly developed areas of Phnom Penh. Being in the heart of the city means easy access to major commercial areas, government institutions, and a plethora of dining and entertainment options.

This accessibility is particularly appealing to professionals and expatriates who prioritize convenience and an urban lifestyle.

The popularity of Daun Penh as a real estate destination began to surge notably in the early 2000s. This was a period marked by rapid urban development and growing foreign investment in Cambodia.

The district's real estate market has seen a consistent uptick in demand since then. While predicting the future of any real estate market is challenging, the enduring appeal of Daun Penh lies in its irreplaceable historical and cultural assets, coupled with its ongoing modern development.

These factors suggest that its popularity is not just a fleeting trend but has a solid foundation for sustained interest.

The demographic attracted to Daun Penh is quite diverse. It includes foreign expatriates drawn to the cosmopolitan lifestyle, business professionals seeking proximity to major commercial centers, and those with a deep appreciation for the cultural and historical aspects of the area.

However, like any urban district, Daun Penh has its drawbacks. The very factors that contribute to its vibrancy such as dense development and bustling streets can also lead to challenges like traffic congestion and noise.

Furthermore, the cost of living and property prices in this central district can be higher than in other parts of Phnom Penh, potentially making it less accessible for some buyers.

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Why is Daun Penh a nice place to live?

Living in Daun Penh, offers a unique blend of urban lifestyle, cultural richness, and convenience, making it a desirable place for many.

The area's lifestyle and culture are deeply rooted in its history and modernity. Here, you can experience the charm of traditional Cambodian life alongside the comforts of contemporary living.

This district is home to significant landmarks like the Royal Palace and the National Museum, which not only add to the area's cultural depth but also provide residents with a sense of living amidst history.

The expatriate community in Daun Penh is quite vibrant. Due to its central location and the amenities it offers, many foreigners find it an appealing place to settle. There are numerous international restaurants, cafes, and bars, catering to a diverse range of tastes and cultures.

This multicultural environment fosters a sense of inclusivity and makes it easier for expatriates to integrate and feel at home.

When it comes to the cost of living, Daun Penh can be on the higher end compared to other areas of Phnom Penh. This is due to its central location, the quality of amenities available, and its popularity among expatriates and professionals.

However, the cost can vary widely depending on your lifestyle choices and housing preferences.

Safety in Daun Penh is a consideration, as it is in any urban area. While it is generally considered safe, especially in well-traveled and busy areas, it's always prudent to be mindful of your surroundings and take standard safety precautions as you would in any city center.

The district is well-equipped with various amenities and facilities. For healthcare, there are facilities like the Central Hospital and the Naga Clinic, known for their quality services. Educational needs are served by several reputable schools, including international options like the International School of Phnom Penh.

Shopping and entertainment needs are catered to by numerous malls and markets, such as the Central Market and Sorya Shopping Center, providing a wide range of products and services.

Infrastructure in Daun Penh is quite developed compared to other parts of the city. The roads are generally well-maintained, although traffic can be a challenge during peak hours.

Utilities like electricity and water supply are reliable, and internet connectivity is excellent, with many providers offering high-speed options suitable for both personal and professional needs.

Accessibility is one of Daun Penh’s strong points. Its central location makes it easily accessible from other parts of Phnom Penh. It’s well connected to major roads and is relatively close to important transport hubs like the Phnom Penh International Airport.

For daily commuting, there are various modes of public transportation available, including buses, taxis, and the popular tuk-tuks. These options make it convenient to navigate around the city and to and from Daun Penh.

How much does it cost to buy real estate in Daun Penh?

If you need a detailed and updated analysis of the prices, rents and yields, you can get our full guide about real estate investment in Cambodia.

Buying property in Daun Penh, can be a diverse and dynamic experience due to the variety of residential properties available and the evolving real estate market.

The types of properties in Daun Penh range from apartments and condominiums to houses and, more rarely, luxury villas. The demand for these properties varies, often influenced by factors like location, amenities, and the unique characteristics of the neighborhood.

Apartments, particularly in modern condominium developments, are in high demand in Daun Penh. This trend is driven by the district's urban appeal, its proximity to business centers, cultural landmarks, and entertainment options.

Many expatriates and professionals prefer apartments for their convenience, security, and modern amenities. Luxury villas, while less common, are sought after by those looking for more space and privacy, albeit at a higher price.

The real estate market in Daun Penh includes both new developments and resale properties. New developments are often high-rise apartments and condominiums, reflecting the growing urbanization and demand for modern living spaces.

Resale properties, including older apartments and houses, offer more traditional living experiences, often at lower prices but with the charm of the district's historical context.

Regarding pricing, the cost of buying property in Daun Penh varies widely. Prices per square meter can range significantly based on factors like the property type, age, location, and the level of luxury.

For instance, modern, high-end condominiums in prime locations may command higher prices than older apartments or houses in less central areas.

However, as a general guideline, prices in Daun Penh are among the highest in Phnom Penh due to its desirability and central location.

Over recent years, property values in Daun Penh have shown a general upward trend. This increase is partly due to the continuous development and urbanization of Phnom Penh, coupled with growing foreign investment and interest in the Cambodian real estate market.

Looking ahead, the real estate market in Daun Penh is poised for further evolution. Any upcoming developments or city planning changes, such as new infrastructure projects, public transportation improvements, or urban renewal initiatives, could significantly impact property values.

For instance, the development of new commercial or mixed-use projects can increase the desirability of nearby residential properties.

Predicting the future of the real estate market in Daun Penh involves considering several factors. These include ongoing urban development, the stability of the Cambodian economy, foreign investment trends, and any changes in government policies related to property ownership and investment.

Given these variables, the market could see continued growth, especially if the district maintains its appeal as a cultural and business center.

Specific factors indicating a potential increase in property values include the continued influx of expatriates and professionals, further modernization and development of the district, and sustained interest from both domestic and international investors.

These factors suggest that Daun Penh will remain a sought-after location for property buyers, potentially driving prices upward in the coming years.

Where is the best area to buy a property in Daun Penh?

Choosing the best area to buy a property in Daun Penh, depends largely on your personal preferences, lifestyle needs, and investment goals.

Daun Penh is a district with a diverse range of neighborhoods, each offering different atmospheres, property types, and price ranges.

In the heart of Daun Penh, areas around major landmarks like the Royal Palace, the Riverside area, and the vicinity of the National Museum are highly sought after. These locations offer a unique blend of historical charm and urban convenience.

Properties here are typically a mix of traditional Khmer houses, colonial-style buildings, and modern apartments. Prices in these central areas tend to be higher due to their prime location, proximity to cultural sites, and vibrant street life.

For those looking for a more serene environment, the areas further away from the Riverside and closer to Wat Phnom, a significant historical and cultural landmark, offer a slightly quieter atmosphere. These areas still provide easy access to the district's amenities but with less of the hustle and bustle of the very central locations.

Property types here vary from older, more traditional homes to newer apartment complexes, and the prices can be somewhat more moderate compared to the heart of the district.

In terms of up-and-coming areas within Daun Penh, neighborhoods that are undergoing development and modernization are worth considering. These areas might offer more competitive prices now, with the potential for value appreciation as the neighborhood develops further.

When looking for a property in Daun Penh, areas like the Street 240 area, known for its boutique shops and cafes, offer a desirable blend of lifestyle amenities and residential charm. This area is popular among expatriates and locals alike, providing a cosmopolitan atmosphere that is both vibrant and comfortable.

On the contrary, areas closer to the commercial hubs or main roads might not be advisable for those seeking a quieter residential experience. These areas can be busy, noisy, and more prone to traffic congestion.

Additionally, while properties in these locations might offer the convenience of being close to business centers, they might lack the community feel and tranquility that some residents prefer.

Ultimately, the best area to buy a property in Daun Penh depends on your individual preferences. Whether you prioritize being in the midst of a bustling urban area, prefer a quiet neighborhood, or are looking for an investment opportunity in an up-and-coming area, Daun Penh offers a variety of options to suit different needs and preferences.

Here is a summary table to help you visualize better. If you need more detailed data and information, please check our property pack for Cambodia.

Area	Atmosphere	Property Types	Price Range	Notes
Riverside & Royal Palace Vicinity	Historical & Urban	Mix of traditional houses, colonial buildings, modern apartments	Higher	Prime location, close to cultural sites
Wat Phnom Vicinity	Serene & Accessible	Traditional homes, newer apartment complexes	Moderate	Quieter, less hustle and bustle
Up-and-Coming Neighborhoods	Developing	Varies, potential for newer developments	Varies, potentially more competitive	Good for long-term investment
Street 240 Area	Cosmopolitan & Vibrant	Varied, popular among expats	Varies	Boutique shops, cafes, popular among expats
Near Commercial Hubs/Main Roads	Busy & Noisy	Varied, often closer to business centers	Varies	Less tranquil, prone to traffic

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Is there a strong rental demand in Daun Penh?

Daun Penh is indeed a hub of strong rental demand, characterized by a blend of both short-term and long-term rental needs.

The target demographic is diverse, including expatriates, business professionals, and tourists, all contributing to a dynamic rental market.

For short-term rentals, the demand is primarily driven by tourists and business travelers. These individuals often seek properties close to major attractions and business centers. Areas near the Riverside, the Royal Palace, and Street 240 are particularly popular for short-term rentals.

The properties in demand here are typically furnished apartments or boutique serviced apartments, offering amenities like Wi-Fi, air conditioning, and in some cases, access to a pool or fitness center. These features cater to the convenience and comfort that short-term renters seek.

On the other hand, long-term rentals are mainly favored by expatriates and professionals working in Phnom Penh. This group tends to prefer areas that provide a balance of convenience and quality of life.

Neighborhoods like those surrounding Wat Phnom and quieter parts of the Riverside area are popular. The properties sought after by long-term renters include apartments, condominiums, and in some cases, detached houses.

They often look for features like good security, modern amenities, proximity to international schools, supermarkets, and healthcare facilities. A well-maintained property in a good location is more likely to attract long-term tenants.

In terms of amenities, factors like security, parking facilities, and on-site maintenance can significantly reduce vacancy rates. For higher-end rentals, amenities like swimming pools, fitness centers, and communal areas are attractive.

These amenities not only add convenience but also enhance the living experience, making the property more appealing to potential tenants.

The potential returns on investment for rental properties in Daun Penh can be quite attractive. Estimations of rental yields vary, but properties in prime locations and with desirable amenities can yield higher returns.

For instance, well-located modern apartments might offer yields in the range of 5-7%, although this is subject to market conditions, the property's condition, and how well it meets tenant demands.

In terms of future demand, properties that combine modern amenities with a convenient location are seeing increasing interest. Apartments and condominiums, especially those in developments with added facilities like pools, gyms, and communal spaces, are becoming more popular.

These properties not only cater to the lifestyle expectations of expatriates and professionals but also offer the convenience and security that are key selling points in the rental market.

As Daun Penh continues to develop and attract a diverse population, properties that can cater to this evolving demographic are likely to provide better yields in the long run.

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Is it easy to buy a property as foreigner in Daun Penh?

Before we answer the question, please know that we have an article dedicated to the experience of buying real estate as a foreigner in Cambodia.

Buying property in Daun Penh, Phnom Penh, as a foreigner involves navigating specific regulations and understanding the local property market to ensure a smooth transaction.

While it is feasible for foreigners to purchase property in this area, there are certain restrictions and processes unique to Cambodia.

However, they can legally own properties in buildings from the first floor upwards, as long as the total foreign ownership in a single building does not exceed 70%. This means that in Daun Penh, foreigners are generally limited to purchasing apartments or condominium units.

The purchasing process typically begins with identifying a suitable property. Once you've found a property, the next steps involve negotiating the price, signing a sales contract, and making a deposit. The full payment is usually required to be made before the transfer of ownership.

It's crucial to ensure that the property has a 'hard title', which is the strongest form of property ownership in Cambodia and offers the most security to the buyer.

One of the primary risks associated with property investment in Daun Penh, as in many emerging markets, is the lack of a fully developed legal framework and transparency in the real estate sector. This can lead to issues like disputes over land titles and property rights.

Additionally, fluctuations in the real estate market could affect property values and the potential for rental income.

Common pitfalls for foreign buyers often include misunderstanding the legal process, issues with land titles, and overestimating rental yields. A unique aspect of buying property in Cambodia is the distinction between 'soft titles' and 'hard titles'.

A 'soft title' is less formal and may not provide the same level of legal ownership assurance as a 'hard title'. Foreign buyers should always aim for properties with 'hard titles'.

Working with a local real estate agent or lawyer is highly advisable. They can provide valuable insights into the local market, assist with navigating the legalities of the purchasing process, and ensure that all documentation is in order. Their expertise is crucial in verifying property titles, understanding local regulations, and negotiating terms.

Common exit strategies for property investors in Daun Penh include selling the property for capital gain or renting it out for ongoing income. The rental market can be lucrative, especially if the property is in a desirable location and well-maintained.

However, selling a property can be subject to market conditions, so investors should be prepared for potential fluctuations in the real estate market.