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SUMMARY
Property prices in Phnom Penh are more likely to stay roughly flat or fall a little further in the near term than begin a broad rise, although the strongest parts of the market are already stabilizing.
The city has already absorbed a substantial correction. Phnom Penh's official residential price index sits roughly 15% below its 2022 peak, so today's buyer is entering after several years of weakness rather than at the top of the previous cycle.
The market is becoming much less uniform. Selected high-end condos have recorded year-on-year price gains even while cheap new projects are launching at dramatically lower prices, which means a single average Phnom Penh condo price is increasingly misleading.
Oversupply is still the biggest obstacle to a broad condo rebound. More than 63,000 completed units were recorded by the end of 2025, roughly triple the stock Phnom Penh had around 2019, while developers are still competing for a limited pool of buyers.
The encouraging change is that developers have finally adapted. New projects are smaller, cheaper and increasingly designed for Cambodian households rather than overseas investors buying off-plan units with pools, guarantees and investor-focused marketing.
Demand is improving, but largely because prices and payment terms have adjusted. Launch sales rates have recovered sharply from the worst point of the downturn, yet buyers are returning on much more favorable terms than developers could demand during the previous boom.
Landed housing is holding up better than mass-market condos. Prices have been relatively stable even though sales remain slow, helped by stronger local preferences for landed homes and developers' ability to delay future phases rather than deliver an entire tower at once.
Rental economics are becoming more attractive as purchase prices fall faster than rents. A well-bought apartment can now produce a mid-single-digit or better gross yield, but weak management and dozens of identical competing units can wipe out much of that advantage.
The main reason not to expect a fast rebound is credit. Mortgage lending is still shrinking, property-related exposure is already large across Cambodia's banking system, and elevated non-performing loans make banks unlikely to finance another housing surge soon.
Foreign investment is not disappearing from Cambodia, but its composition has changed. Manufacturing is attracting much more capital while construction and real-estate investment have weakened, which is healthier for long-term job creation but much less supportive of another speculative Phnom Penh property boom.
Infrastructure will create local winners rather than lift the whole city. Techo International Airport and possible future urban rail connections strengthen selected southern and transport-linked locations, but they do nothing to remove excess condo inventory in unrelated parts of Phnom Penh.
The most likely next phase is an uneven bottoming process: weaker investor-oriented condos can still fall, while good central apartments, affordable local-buyer projects, sensible landed developments and genuinely infrastructure-linked locations stabilize first. A convincing citywide upswing probably needs mortgage lending, absorption, household demand and the official price index to improve together.
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Are Phnom Penh property prices still falling now?
Yes. Phnom Penh property prices are still weaker than a year ago, although the latest data suggest the fall is becoming less one-directional.
The National Bank of Cambodia’s Residential Property Price Index is the best broad measure we have. Phnom Penh’s index was about 5% lower year-on-year in early 2026 and roughly 15% below its October 2022 peak. That is already a meaningful correction for a market where headline asking prices often move more slowly than actual transaction values.
More recent monthly data have been less bleak. The national residential index rose month-on-month later in the first half of 2026, and Phnom Penh contributed to that improvement. One or two better readings are not a recovery, but the market is no longer falling cleanly every month either.
The useful way to read the current numbers is that sellers have already absorbed several years of weaker pricing, while buyers still have the upper hand in many projects.
| Phnom Penh price measure | Earlier level | Recent reading | What it tells us |
|---|---|---|---|
| Residential price index peak | About 116 | — | Previous cycle high |
| Recent Phnom Penh index | Around 99 | — | Back near the 2020 base |
| Change from peak | — | About -15% | A large part of the correction has happened |
| Recent annual change | — | Around -5% | Prices are still weaker year-on-year |
| Latest monthly readings | — | Mixed to positive | The decline may be losing momentum |
Has Phnom Penh already had its property crash?
Mostly, yes. Phnom Penh has already gone through a substantial property correction, except it happened slowly enough that it never looked like a dramatic crash.
The National Bank’s index peaked in 2022 and has spent the following years moving lower. Once inflation is included, the loss in purchasing-power terms becomes larger still. Global Property Guide’s inflation-adjusted series shows negative real price performance across several recent years.
That slow decline fits what we see on the ground. Developers have cut launch prices, extended payment schedules and added incentives. Resale owners frequently have to compete with developer inventory in the same building. Some sellers have simply waited rather than accepting a large visible discount, which helps explain why the downturn has felt drawn out.
Phnom Penh is now much closer to the bottom of its cycle than it was three years ago. Another 30% citywide fall would require a much more severe shock than the weakness we currently see.
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Are Phnom Penh condo prices actually recovering?
Only in parts of the market. Better Phnom Penh condos have started to hold up, while ordinary investor-focused stock still has plenty of competition.
CBRE data from late 2025 showed high-end condominium prices increasing by roughly 5% year-on-year, with average pricing above $2,800 per square meter. That was one of the clearest signs that stronger buildings in better locations were finding buyers again.
At the same time, Knight Frank recorded an average launch price of just $676 per square meter for new projects in the second half of 2025. That figure looks almost incompatible with the high-end data until we look at what developers are building: the new supply is increasingly cheap, simple and aimed at Cambodian end-users rather than foreign investors.
Prime projects can therefore rise while developers elsewhere cut prices aggressively enough to reach local buyers. A citywide condo average hides too much at this point.
| Phnom Penh condo segment | Approximate recent price | Current direction | What we see |
|---|---|---|---|
| New affordable launches | ~$676/m² | Very price-sensitive | Developers chasing local demand |
| Typical resale listings | Often ~$1,500–$2,000+/m² | Mixed | Huge variation by building |
| Better central stock | ~$2,500–$3,000/m² | More resilient | Scarcity and location help |
| High-end condos | Above ~$2,800/m² | Recently higher YoY | Selective recovery is visible |
Does Phnom Penh still have way too many condos?
Yes. Phnom Penh still has too many condos for the amount of buying demand available today.
Knight Frank counted 63,334 completed condominium units by the end of 2025, up 9.6% from a year earlier. Broader estimates from other firms put the total even higher depending on what they count.
The longer-term increase is the real story. Phnom Penh had roughly 20,000 condo units around 2019 according to IPS estimates. The stock has therefore roughly tripled in about six years.
Demand did not triple with it.
Developers clearly understand the problem now. Knight Frank recorded only nine condo launches during 2025, and many of those projects were smaller, cheaper developments built for Cambodian buyers. The pipeline has also shifted toward core and mid-tier units.
That slowdown will eventually help, but existing owners still have to compete with tens of thousands of units already delivered plus projects under construction. Oversupply remains the main reason we do not expect broad condo prices to jump soon.
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Are buyers finally absorbing Phnom Penh’s condo oversupply?
Slowly. Phnom Penh condo demand is improving in places, but buyers have not absorbed enough stock yet to remove the oversupply problem.
IPS estimated average vacancy at around 15% per condominium project during 2025, with occupancy gradually improving. Knight Frank also found that better-priced launches could still sell when the location and developer were credible.
The strongest clue came from launch sales rates. Knight Frank recorded a 29% first-quarter sales rate for projects launched in the second half of 2024, up from 15% in the first half and only 6% in the first half of 2023. That is a serious improvement from the worst part of the cycle.
The catch is price. Developers achieved that improvement partly by offering affordable units and flexible payment terms. Buyers are returning because the product has become cheaper and more practical.
Absorption is happening, but buyers are setting the terms.
Why are Phnom Penh developers suddenly building much cheaper condos?
Because Cambodian buyers now matter much more to the Phnom Penh condo market than they did during the old foreign-investor boom.
Knight Frank’s latest research shows the shift clearly. The nine condo projects launched in 2025 focused heavily on affordable and low-to-mid-range units. Piphup Thmey alone launched two projects totaling roughly 1,500 units aimed squarely at local buyers.
The pricing changed with the customer. Average launch prices fell to about $676 per square meter in the second half of 2025. Developers can no longer assume that an overseas investor will pay $2,000 or $3,000 per square meter simply because a project has a rooftop pool and a guaranteed-return marketing package.
Cambodian households care much more about the total purchase price, monthly payment and actual usefulness of the apartment.
Over time, that gives the market a firmer base. It also means the next cycle is unlikely to look like the last one.
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Are landed homes in Phnom Penh holding up better than condos?
Yes. Phnom Penh landed housing is currently holding its value better than most mass-market condos, although sales are still slow.
Knight Frank put average landed housing prices around $1,550 per square meter in the second half of 2025, with relatively small movements through the year. Better-located projects with sensible pricing even managed selective increases.
The weak point is transaction speed. Average sales absorption was only around 2% to 3% during the second half of 2025. Expensive landed homes were particularly difficult to move, while core and mid-market projects performed better.
Sellers still have enough patience to defend prices, but buyers are hardly rushing in.
Cambodian households also naturally support landed housing more than condos. Landed homes fit local preferences better, particularly for families, and developers can respond to weak demand by slowing new phases rather than completing an entire tower at once.
| Landed housing measure | Recent reading | What it means |
|---|---|---|
| Average selling price | ~$1,550/m² | Prices have held fairly well |
| H2 sales absorption | ~2–3% | Transactions remain slow |
| Core/mid-tier demand | Stronger | Local buyers still participate |
| High-end demand | Weak | Expensive homes remain exposed |
| New supply behavior | More cautious | Developers are protecting the market |
Are Phnom Penh rents strong enough to stop prices falling?
For good apartments, yes. Phnom Penh rents now give investors a much better reason to buy than they did near the top of the previous cycle.
Market estimates generally put gross condo yields around the mid-single digits, with some well-bought units producing more. That becomes interesting when purchase prices have already fallen substantially.
Imagine a condo renting for $500 a month. At a $120,000 purchase price, gross yield is 5%. If the same rental income can be bought for $90,000 after a correction, the yield rises to 6.7%. The apartment becomes more attractive even if the rent never increases.
We are already seeing that dynamic in areas where sale prices have adjusted faster than rents. Mean Chey, Sen Sok, Chbar Ampov and similar districts can produce stronger yields than expensive central projects because the entry price is lower.
Rental income can put a floor under the better parts of the market. It will do much less for an apartment in a poorly managed building where dozens of identical units are available for rent at the same time.
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Is weak mortgage lending still dragging Phnom Penh property down?
Definitely. Weak mortgage lending is one of the clearest reasons Phnom Penh property prices are unlikely to surge again soon.
The National Bank’s 2025 Financial Stability Review shows mortgage credit falling 5.4% during the year even while overall lending by deposit-taking institutions grew 5.3%. Banks were still extending credit, but housing loans were moving in the opposite direction.
Property exposure is already large. Real-estate lending represented about 12.4% of bank credit, construction another 10.4%, and mortgages about 10%. Taken together, property-related lending sits around one-third of the system before we count indirect exposure.
Loan quality has also deteriorated. The IMF has repeatedly highlighted rising non-performing loans and the connection between weaker real estate, developers, households and bank balance sheets. Its latest assessment still describes real estate as a key financial vulnerability.
Banks therefore have little incentive to reopen the credit taps aggressively.
Without easier mortgages, local buyers cannot push prices higher quickly, especially now that developers increasingly depend on Cambodian households rather than cash-rich overseas investors.
| Credit measure | Recent direction | Effect on Phnom Penh property |
|---|---|---|
| Total bank lending | Growing modestly | Mild support |
| Mortgage credit | Falling | Clear negative |
| Real-estate lending | Still large | Banks already have heavy exposure |
| Construction lending | Still significant | Supply financing remains available |
| Non-performing loans | Elevated | Banks stay cautious |
| Household leverage | Already high | Limits borrowing capacity |
Is Cambodia’s economy strong enough to push Phnom Penh prices back up?
No, not currently. Cambodia’s economy is too soft to produce the kind of broad housing rebound that would lift most Phnom Penh property prices.
The IMF’s latest assessment is weaker than its previous forecast. It now expects Cambodian economic growth of about 3% in 2026 after roughly 5.3% in 2025 and 6% in 2024.
Domestic demand, construction and real estate remain subdued. The IMF also expects inflation to run much higher this year because of energy costs.
That hits property from both sides. Household income is growing more slowly while living expenses are rising. Families have less room to take on a mortgage, and businesses are more cautious about expansion.
Cambodia still has genuine growth engines in manufacturing, exports, infrastructure and foreign investment. Those will matter over several years. Right now, though, they are not creating enough household purchasing power to restart a broad Phnom Penh housing boom.
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Is foreign money coming back to Phnom Penh property?
Foreign money is coming back strongly to Cambodia, but much less of it is going into property.
The National Bank recorded around $5.1 billion to $5.2 billion of foreign direct investment in 2025, up roughly 16% to 18% depending on the reporting series. China still accounted for more than 70% of inflows.
Manufacturing was the standout. The National Bank’s Financial Stability Review puts manufacturing FDI at about $3.5 billion, up 53%, and representing roughly 68% of total inflows.
Construction and real-estate FDI moved the other way, falling about 32% when grouped together in the National Bank’s sector data. Another NBC breakdown put real-estate investment alone down 23.2%.
Cambodia is attracting factories, production capacity and longer-term business investment while receiving less speculative money for towers and development sites.
We prefer that mix for the city’s long-term health because jobs eventually create real housing demand. It gives us much less reason to expect another fast property boom today.
Will Techo Airport and Phnom Penh’s future transport projects push prices higher?
Yes in selected locations, but infrastructure will create winners street by street rather than lift every Phnom Penh property at once.
Techo International Airport is already operating around 20 kilometers south of Phnom Penh. The first phase can handle 15 million passengers a year, and the long-term plan raises capacity to 30 million and eventually 50 million.
The airport operator wants passenger traffic to increase from roughly 5.3 million in 2025 to 10 million by 2030. If that happens, the southern corridor should attract more hotels, logistics facilities, offices, retail and housing.
Phnom Penh is also studying an urban rail system with international development partners. That could eventually produce a much stronger station-location effect inside the city.
We would be careful about paying for either story too early. A plot directly connected to a major airport road has a clearer case than an apartment advertised as being “near the airport” from several kilometers away. Future metro land becomes much more interesting once routes, stations and funding are actually fixed.
Infrastructure strengthens specific locations. It does not clean up excess condo inventory elsewhere in Phnom Penh.
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What needs to change before Phnom Penh property prices really rise again?
Phnom Penh needs better credit, lower inventory and stronger local demand before we can call the next property upswing convincing.
The first thing we want to see is sustained positive annual growth in the National Bank’s Phnom Penh property index. Monthly rebounds are useful early clues, but annual growth would show that the market has genuinely turned.
Mortgage lending also needs to stop shrinking. Developers are increasingly targeting Cambodian households, so a recovery becomes difficult if those same households cannot borrow more easily.
Existing condo inventory then has to come down through occupancy and resale absorption. Slower construction helps, although Phnom Penh still has years of previously completed supply to work through.
Finally, economic growth needs to improve enough to raise household confidence and incomes. As seen above, the IMF’s latest forecast is currently too weak to support a broad housing boom.
We do not need every indicator to turn at exactly the same time. Three or four of them moving clearly in the right direction would be enough to make us much more constructive on the whole city.
So are Phnom Penh property prices likely to rise or fall?
Phnom Penh property prices are more likely to stay roughly flat or fall a little further in the near term, with the best properties already starting to behave better than the overall market.
The easiest part of the decline has probably already happened. Phnom Penh prices are roughly 15% below their previous index peak, developers have cut new launches, affordable projects are finding buyers again, rents can produce decent yields, and selected high-end condos have already recorded price growth.
A broad rebound still looks premature. The city has more than 63,000 completed condos in Knight Frank’s latest count, mortgage lending is contracting, Cambodia’s latest growth outlook has weakened, and foreign investment is flowing much more strongly into manufacturing than into real estate.
That leaves Phnom Penh in a very uneven bottoming phase.
Mass-market condos with dozens of similar competing units can still get cheaper. Older investor-oriented buildings with weak management are particularly vulnerable.
Better central condos, genuinely affordable projects aimed at Cambodian buyers and sensible landed developments should hold up much better. Some are already rising.
Land and housing around infrastructure corridors can also outperform when the location has a direct connection to new economic activity rather than just a marketing story.
Our view is slightly bearish on Phnom Penh property prices overall, but much less bearish than it would have been two or three years ago. More sideways movement and selective declines look likely before a broad rise. The next Phnom Penh property cycle will probably begin property by property, long before the citywide numbers look obviously bullish.
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OUR METHODOLOGY
This analysis tests whether property prices in Phnom Penh are more likely to rise or fall based on the evidence available today. We break the market into the forces that can actually move prices: observed price direction, supply and absorption, differences between property segments, rental economics, credit conditions, the wider Cambodian economy, foreign investment and infrastructure.
We prioritize primary data and established property research over anecdotes, asking prices and general market commentary. The National Bank of Cambodia’s Residential Property Price Index is our main broad measure of Phnom Penh price direction, while its financial-stability and monetary datasets are used for mortgage lending, banking exposure and investment flows.
We separate broad market evidence from segment-specific evidence. A rise in high-end condominium prices does not mean the whole Phnom Penh condo market has recovered, just as a weak citywide index does not mean every well-located property is still losing value.
Short-term improvements are treated as evidence of changing conditions rather than proof of a new cycle. Monthly price increases, higher launch sales and better performance in selected projects become much more convincing when they appear alongside improving credit, lower inventory and stronger household demand.
Knight Frank Cambodia’s market research is used for condominium completions, new launches, launch pricing, sales conditions and landed-housing data. Its H1 and H2 2025 reports also help show how absorption and developer strategy changed through the downturn.
The IMF’s Cambodia assessments are used for economic growth, domestic demand, construction and real-estate weakness, inflation, private-sector leverage, non-performing loans and wider financial-sector risks. We use these macro indicators to judge whether the economy is strong enough to support a broad property recovery rather than to predict individual project prices.
Infrastructure is treated as a location-specific factor. Official information from Techo International Airport is used for airport capacity and traffic targets, while Cambodia’s Ministry of Public Works and Transport provides the basis for the discussion of Phnom Penh’s proposed urban rail system and preliminary route work.
Key sources used for this analysis include: National Bank of Cambodia residential property and monetary statistics, the National Bank of Cambodia’s Residential Property Price Index documentation, the National Bank of Cambodia Financial Stability Review archive, the Financial Stability Review 2025, the National Bank of Cambodia Annual Report 2024, the National Bank of Cambodia Economic and Monetary Statistics archive, the March 2026 Economic and Monetary Statistics Bulletin, the IMF’s 2026 Article IV mission statement for Cambodia, the IMF’s 2025 Article IV Consultation report, the IMF’s 2025 Article IV Executive Board conclusion, Knight Frank Cambodia Real Estate Highlights, Knight Frank Cambodia Real Estate Highlights H2 2025, Knight Frank Cambodia Real Estate Highlights H1 2025, Techo International Airport, Techo International Airport’s inauguration and development plan, Cambodia’s Ministry of Public Works and Transport on the Phnom Penh metro preliminary study, the Ministry’s later metro study update, and CBRE Cambodia’s research on Phnom Penh’s southern districts.
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