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Cambodia's property market is experiencing a period of stabilization and cautious optimism as of September 2025.
After weathering significant challenges in recent years, the market is showing signs of recovery with moderate growth expected, particularly in affordable and mid-range sectors that are benefiting from new infrastructure developments. Property prices in Phnom Penh have stabilized following earlier declines, while rental yields remain attractive at 6-8% in major cities, making Cambodia an interesting proposition for both investors and those looking to relocate.
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Cambodia's property market is stabilizing in 2025 with moderate growth expected in affordable sectors and attractive rental yields of 6-8% in major cities.
While luxury segments face oversupply challenges, infrastructure-driven areas and affordable housing show stronger performance prospects.
| Market Segment | Current Status | 2025 Outlook |
|---|---|---|
| Phnom Penh Condos | Prices $60,000-$500,000, stabilizing after 30% decline since 2019 | 5-10% growth expected in mainstream markets |
| Rental Yields | 6.5% average gross yields in Phnom Penh | Stable yields with coastal areas potentially reaching 8-12% |
| New Supply | 5,800+ new units launched H1 2025 | Focus shifting to affordable/mid-range from luxury |
| Foreign Investment | Steady but no longer dominant | Local buyer activity increasing with government support |
| Commercial Real Estate | Office occupancy 64%, retail 58.6% | Continued pressure expected through 2025 |
| Luxury Market | Persistent oversupply, flat prices | Potential value opportunities for long-term investors |
| Infrastructure Impact | Techo Airport and road expansions driving growth | Strongest appreciation in infrastructure corridors |
How are property prices in Phnom Penh and other major cities trending right now?
Property prices in Phnom Penh have stabilized as of September 2025 following a challenging period of adjustment.
In Cambodia's capital, condominium prices currently start at $60,000 in emerging neighborhoods and can reach $500,000 in luxury developments. On a per-square-meter basis, city center properties range from $2,000 to $2,700, while areas outside the central district typically cost between $1,000 and $1,500 per square meter.
The Phnom Penh residential market is forecasted to experience 5-10% price growth in 2025, particularly in mainstream market segments. This represents a recovery from significant price drops of up to 30% that occurred between 2019 and the recent stabilization period. The affordable and mid-range sectors are showing the strongest momentum, benefiting from government support and infrastructure developments.
In Siem Reap, property prices are rising more rapidly at 8-10% annually, driven by tourism recovery and a growing expat community. Other major cities like Sihanoukville are also seeing gradual price improvements, though growth rates vary by specific location and property type.
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What rental yields can investors realistically expect in different parts of Cambodia?
Rental yields in Cambodia remain attractive compared to many regional markets, averaging 6-8% gross yields in major cities as of September 2025.
In Phnom Penh specifically, gross rental yields average 6.5%, with one-bedroom units typically yielding 6.6% and two-bedroom apartments averaging 5.0%. Some newer developments are promising yields up to 10%, though investors should verify these claims carefully. Net yields after expenses, taxes, and management costs are typically 1.5-2% lower than gross yields.
Siem Reap and coastal markets offer potentially higher yields ranging from 8-12%, particularly for properties catering to the tourism sector. However, these areas may experience more seasonal variation and dependency on tourism flows.
Secondary cities and emerging areas may offer higher gross yields, but investors should factor in potentially longer vacancy periods, limited tenant pools, and higher management costs. The key to achieving strong yields is selecting properties in well-located developments with proven rental demand.
How much new housing supply is coming onto the market, and how is it being absorbed?
The Cambodian property market saw a significant increase in new launches during the first half of 2025, with over 5,800 new units introduced in Phnom Penh alone.
Developer confidence is returning after the pandemic-era downturn, as evidenced by the substantial number of projects launched in Q1-Q2 2025. However, there has been a strategic shift in the type of supply being delivered. Developers are moving away from luxury and high-rise formats toward affordable and mid-range offerings specifically aimed at Cambodian end-users.
Market absorption remains modest overall, with clear segmentation in performance. The affordable housing segment is absorbing new supply more effectively than higher-end developments. The luxury market continues to face oversupply challenges, with slower absorption rates creating a buyer's market in premium segments.
This supply-demand dynamic suggests that developers are responding to market conditions by focusing on segments with stronger absorption potential, while luxury inventory from previous years continues to work through the system.
What demand trends are we seeing among local buyers compared to foreign buyers?
There has been a marked shift toward increased local buyer activity relative to previous years, while foreign demand remains steady but is no longer the dominant force it once was.
Government policy initiatives are encouraging first-time Cambodian buyers, particularly through measures like registration tax exemptions for homes under $70,000. This has significantly boosted demand in lower and middle-income brackets, making homeownership more accessible to local residents.
Foreign investor demand continues at steady levels but represents a smaller proportion of total market activity compared to the peak years. International buyers are showing more selectivity, focusing on well-located properties with strong fundamentals rather than speculative purchases.
The shift toward local demand is seen as a positive development for market stability, as it creates a more sustainable foundation less dependent on foreign capital flows and speculative investment patterns.
How is government policy, especially around foreign ownership and taxation, shaping the market?
Government policy in Cambodia continues to support market development while maintaining established restrictions on foreign ownership.
| Policy Area | Current Rules | Market Impact |
|---|---|---|
| Foreign Ownership | Limited to condos above ground floor, max 70% of building | Maintains structured foreign investment while protecting local interests |
| First-Time Buyer Support | Registration tax exemption for homes under $70,000 | Significantly boosting local demand in affordable segments |
| Property Taxation | No recent increases in property taxes | Stable holding costs supporting investor confidence |
| Regulatory Transparency | Improving enforcement and clarity | Reducing uncertainty for both local and foreign investors |
| Development Approvals | Streamlined processes for affordable housing | Encouraging developers to focus on local market needs |
While no major tax increases have been implemented recently, investors should remain vigilant as regulatory transparency and enforcement continue to improve. The government appears committed to supporting sustainable market growth while ensuring adequate housing for Cambodian citizens.
What infrastructure or development projects are driving real estate hotspots?
New infrastructure developments are creating significant opportunities in specific corridors around Cambodia's major cities as of September 2025.
The most impactful project is the new Techo Airport, which is driving property price appreciation and development activity in surrounding districts. This major infrastructure investment is creating new growth corridors with strong potential for property value appreciation.
Suburban road expansions and improved connectivity are also contributing to real estate hotspots, particularly in areas that previously lacked adequate transportation links to city centers. Properties located along these infrastructure corridors are experiencing the strongest price appreciation and development interest.
Urban planning initiatives in Phnom Penh, including improved public transportation and utility infrastructure, are making previously less desirable areas more attractive to both residents and investors. These infrastructure improvements are creating new pockets of demand and development opportunity.
Investors should focus on areas benefiting from confirmed infrastructure projects rather than speculating on announced but unconfirmed developments.
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How is the availability and cost of mortgage financing evolving in Cambodia?
Mortgage financing conditions in Cambodia are gradually improving for local buyers, while options for foreigners remain limited as of September 2025.
For Cambodian citizens, mortgage availability is on an upward trend with declining interest rates and looser eligibility requirements due to central bank stimulus measures. This improved access to financing is supporting the increase in local buyer activity and contributing to demand in the affordable housing segment.
Foreign buyers continue to face significant constraints in mortgage financing, typically requiring higher equity contributions and dealing with more limited lender options. Most international investors need to rely on cash purchases or alternative financing arrangements rather than traditional mortgage products.
The improving domestic mortgage market is considered a positive development for overall market stability, as it reduces dependence on cash-only transactions and foreign investment for market liquidity. However, foreign investors should plan for higher upfront capital requirements when considering Cambodian property investments.
What risks should investors consider, like oversupply or political changes?
Several key risks warrant careful consideration for property investors in Cambodia as of September 2025.
Oversupply remains a significant concern, particularly in the luxury and high-rise segments where excess inventory continues to weigh on prices and rental demand. This oversupply situation could persist for several years, especially if new luxury developments continue to enter the market.
Global financial conditions pose another risk, as tighter international credit markets and higher global interest rates could reduce foreign investment flows and impact property demand. Regional political uncertainties, while currently stable, could affect investor sentiment if conditions change.
Regulatory and tax policy changes represent ongoing risks, as the government continues to evolve its approach to property market regulation. While domestic stability has improved, sudden policy shifts could impact market dynamics, particularly for foreign investors.
Investors should also consider the risk of sudden demand drops due to economic downturns or external shocks, given the market's relatively small size and concentration in specific geographic areas.
How is the luxury property market performing compared to affordable housing?
The luxury property market in Cambodia continues to underperform compared to affordable housing segments as of September 2025.
- Luxury Market Challenges: Persistent oversupply keeping prices flat with limited transaction volume
- Affordable Sector Strength: Better absorption rates and price appreciation near infrastructure developments
- Mid-Range Opportunity: Suburban mid-range projects showing improved uptake and value growth
- Investment Strategy: Luxury properties may offer value opportunities for patient, long-term investors
- Government Support: Policy measures specifically targeting affordable homeownership boosting this segment
The luxury segment's challenges create potential value-buying opportunities for investors with long-term horizons and sufficient capital to weather extended holding periods. However, the affordable and mid-range sectors offer more immediate prospects for both capital appreciation and rental income.
What's happening in the commercial real estate sector, especially offices and retail?
Cambodia's commercial real estate sector is facing significant headwinds in 2025, with both office and retail segments under pressure.
Office space in Phnom Penh's Central Business District is averaging $24 per square meter with occupancy rates of approximately 64%. These metrics reflect the challenges facing the office sector, including reduced business expansion and changing work patterns affecting demand for traditional office space.
The retail sector is experiencing similar difficulties, with average rents of $20.9 per square meter and occupancy rates of 58.6%. Declining rents and lagging absorption are attributed to slowing business activity and changes in consumer shopping patterns.
However, the industrial and logistics sector presents a brighter outlook, benefiting from Cambodia's position in regional supply chains and e-commerce growth. This sector is showing more resilience compared to traditional office and retail commercial real estate.
It's something we develop in our Cambodia property pack.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Cambodia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
How is the tourism industry influencing demand for condos, hotels, and short-term rentals?
Tourism recovery is providing a positive boost to specific segments of Cambodia's property market, particularly in tourist-dependent areas.
Inbound tourism recovery is increasing demand for hotels and short-term rental condominiums, especially in Siem Reap near Angkor Wat and in coastal areas like Sihanoukville. This tourism-driven demand is supporting rental yields and encouraging the revival of hospitality-linked property developments.
Short-term rental platforms are seeing increased activity, benefiting condo owners in well-located tourist areas. Properties near major attractions, beaches, or cultural sites are experiencing stronger rental demand and potentially higher yields compared to long-term residential rentals.
However, full pre-pandemic tourism levels have not yet been reached, meaning there's still room for further growth as international travel continues to normalize. Tourism-dependent properties may experience seasonal variations and remain vulnerable to external factors affecting travel patterns.
Investors considering tourism-linked properties should evaluate location quality, seasonal demand patterns, and regulatory requirements for short-term rentals in their target areas.
What do analysts and agencies forecast for Cambodia's property market over the next 3–5 years?
Most analysts forecast continued gradual growth for Cambodia's property market through 2028, with performance varying significantly by market segment.
Residential property prices are expected to grow at 5-10% annually, assuming economic and political stability continues. This growth is contingent on sustained infrastructure development, stable government policies, and continued improvement in domestic financing conditions.
Market performance will remain highly segmented, with affordable and mid-range properties in infrastructure-linked areas expected to outperform luxury, office, and retail assets. The luxury residential segment may continue facing headwinds for several more years due to persistent oversupply.
Commercial real estate, particularly office and retail, is expected to face ongoing challenges through at least 2026, with recovery dependent on broader economic growth and business expansion. The industrial and logistics sector is projected to maintain stronger performance due to Cambodia's strategic location in regional trade routes.
Long-term forecasts remain cautiously optimistic, with analysts emphasizing the importance of careful property selection and location analysis rather than broad market exposure. Infrastructure-driven appreciation and tourism recovery are seen as key growth drivers for the next 3-5 years.
It's something we develop in our Cambodia property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Cambodia's property market in 2025 represents a consolidating market with selective opportunities for informed investors.
While challenges remain in luxury and commercial segments, the combination of government support for affordable housing, infrastructure development, and tourism recovery creates a foundation for moderate but sustainable growth in targeted market segments.
Sources
- BambooRoutes - Phnom Penh Property Analysis
- Global Property Guide - Cambodia Rental Yields
- BambooRoutes - Siem Reap Property Market
- Beach and Houses - Phnom Penh ROI Analysis 2025
- Global Property Guide - Cambodia Price Trends
- CBRE Asia Pacific - Phnom Penh Mid-Year Review 2025
- Good Value Property - Phnom Penh Q1 2025 Outlook
- Asia Property Awards - Cambodia Market Recovery
- World Property Journal - Cambodia Real Estate Report 2025
- Global Property Guide - Cambodia Price History