Authored by the expert who managed and guided the team behind the Cambodia Property Pack
Yes, the analysis of Phnom Penh's property market is included in our pack
What is happening in Phnom Penh’s real estate market? Are prices on the rise or decline? Is the city still attracting foreign investors? How are Cambodia’s government policies and taxes shaping the real estate landscape in 2025?
These are the questions we hear every day from professionals, buyers, and sellers alike, from the bustling streets of Phnom Penh to the serene banks of the Mekong River. Perhaps you’re curious about these trends too.
We know this because we stay closely connected with local experts and individuals like you, exploring the Phnom Penh real estate market daily. That’s why we crafted this article: to offer clear answers, insightful analysis, and a comprehensive view of market trends and dynamics.
Our aim is straightforward: to make sure you feel informed and confident about the market without needing to search elsewhere. If you think we missed something or could improve, we’d love to hear your feedback. Feel free to message us with your thoughts, and we’ll strive to enhance this content for you.
How this content was created 🔎📝
1) Affordable housing prices will increase as demand from young families and first-time buyers grows
Young families and first-time buyers are flocking to Phnom Penh for affordable housing.
Driven by a youthful population eager for homeownership, over 50% of potential buyers are on the hunt for budget-friendly homes. This surge is fueled by the Cambodian government's incentives, like property tax exemptions for homes under $70,000 and those between $70,000 and $210,000, available until the end of 2025. These perks make it easier for young families to dive into the housing market.
Phnom Penh's rapid urbanization, with its population now over 2.2 million, is also pushing up the demand for housing. The city is buzzing with growth, and young families are eager to settle in. As the city expands, the need for affordable homes is more pressing than ever.
Economic forecasts are optimistic, predicting continued growth in the housing market thanks to rising disposable incomes and favorable economic conditions. This means the demand for housing will keep climbing. Developers are responding by increasing the supply of affordable homes, but with more young families and first-time buyers in the mix, prices are bound to rise.
As more people compete for these properties, the market is heating up. The combination of government incentives, urban growth, and economic optimism is creating a perfect storm for rising housing prices. Young families and first-time buyers are at the forefront of this trend, eager to secure their piece of Phnom Penh.
Sources: DHL, Phnom Penh Post, GGGI
2) Foreign investors will target mid-range properties for better returns
Foreign investors are turning their attention to mid-range properties in Phnom Penh for better returns.
In recent years, mid-range properties in Phnom Penh have been a hot ticket, offering rental yields of about 6%. This is a stark contrast to luxury properties, which are struggling with an oversupply and only offer yields of 3-4%. The sweet spot for these mid-range homes is between $80,000 and $200,000, attracting both expatriates and the growing local middle class.
Phnom Penh is buzzing with activity, welcoming around 200,000 new residents each year. This influx is driving demand for mid-range homes, ensuring high occupancy rates and making them a stable investment. The city's rapid urbanization and population growth are key factors in this trend.
Investors are drawn to the promise of steady returns, and Phnom Penh's economy is on their side, with a projected GDP growth rate of 5.8% in 2024. This economic growth aligns perfectly with the investors' desire for stability and consistency.
Government incentives are also playing a role in this shift. The removal of the 40% stamp duty for developers building affordable units has made mid-range property development more attractive. This move is encouraging more projects in this segment, further boosting its appeal.
Sources: Construction Property, Invest Asian, B2B Cambodia
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) Rental yields in central Phnom Penh will dip slightly as property availability increases
Central Phnom Penh is buzzing with new residential developments.
In 2023, the city saw a boom with over 1,600 new condos popping up in just the first half of the year. By the end of the year, another 8,000 units are expected to join the market. This flood of new properties means more choices for renters, but it also means higher vacancy rates and a squeeze on rental yields.
Office spaces aren't immune to these changes either. The current occupancy rate is a modest 62.2%, showing that demand isn't quite matching the supply. Retail spaces are in a similar boat, with occupancy dipping to 63.4%. This oversupply hints at more vacancies and, you guessed it, lower rental yields.
The government is also playing a part, with the Ministry of Land Management, Urban Planning and Construction giving the green light to 2,600 construction projects in just the first three quarters of 2023. This means even more housing options, which could further nudge rental yields down.
CBRE Cambodia's Q1 2024 report adds to the picture, noting that while no new projects have launched, existing ones are wrapping up, adding to the residential supply. This ongoing increase in available properties is likely to keep pushing vacancy rates up and rental yields down.
Sources: Cambodia Investment Review, Cambodia Investment Review, Khmer Times
5) Phnom Penh’s property prices will rise moderately with steady economic growth
Residential property prices in Phnom Penh are set to rise moderately by 2025 due to steady economic growth.
With Cambodia's economy on the upswing, rising GDP is boosting consumer confidence, making people feel more financially secure. This newfound confidence means more folks are ready to invest in property, which naturally pushes prices up. Imagine having a bit more cash in your pocket; you're more likely to consider buying a home, right?
Foreign investors are also eyeing Phnom Penh's real estate market, bringing in a wave of capital. This influx supports new property developments and increases demand for both residential and commercial spaces. When investors flock to a market, it often leads to higher property values, as everyone wants a piece of the pie.
The government is playing its part by pumping money into infrastructure projects. New roads, bridges, and public transport systems are making the city more accessible and attractive. As these areas become easier to reach, more people are likely to move in, which means more demand for housing and, you guessed it, higher property prices.
Phnom Penh is becoming a more connected city, and this connectivity is a magnet for new residents. As more people move in, the demand for housing naturally increases, driving up property values. It's like a domino effect; better infrastructure leads to more residents, which leads to higher demand and prices.
So, if you're thinking about buying property in Phnom Penh, keep an eye on these trends. The combination of economic growth, foreign investment, and improved infrastructure is setting the stage for a vibrant real estate market.
Sources: Future Forum, Cambodia Investment Review, B2B Cambodia
Get to know the market before you buy a property in Phnom Penh
Better information leads to better decisions. Get all the data you need before investing a large amount of money. Download our guide.
6) Affordable rental properties will yield more as demand from local workers increases
Phnom Penh is buzzing with a surge in demand for affordable rental properties, thanks to local workers.
With Cambodia's employment rate hitting an impressive 99.3% in 2023, more people are working and hunting for homes, pushing up the need for rentals. The city is a magnet for the young crowd, with 65% of the population under 35 flocking to urban areas for job opportunities.
The government's ambitious infrastructure projects, like the Master Plan 2035, are set to create even more jobs, which means an even greater need for rental properties in the future. This influx of young workers is a big reason why affordable housing is in such high demand.
Reports of housing shortages in urban areas are common, and when demand outstrips supply, rental yields tend to rise. Many local workers prefer renting over buying, which keeps the rental market thriving.
As disposable income among the working class increases, more people can afford to rent, further fueling this demand. This trend is a clear indicator that affordable rental properties will see a yield increase as demand from local workers rises.
Sources: Khmer Times, World Bank, Odom Phnom Penh
7) Updated property tax laws will affect investment strategies for local and foreign buyers
Changes in property tax laws are shaking up how both local and foreign buyers approach real estate investments in Cambodia.
For local buyers, the government has extended tax exemptions for homes under $70,000 and for first-time buyers in projects between $70,000 and $210,000. This means less financial stress for moderate-income families, making homeownership more accessible. With the market still recovering from Covid-19, these exemptions are a lifeline, encouraging more transactions and boosting affordable housing projects.
Local investors are likely to shift their focus towards affordable housing, given the increased demand and favorable tax conditions. The market is currently dealing with oversupply and low prices, so these tax breaks are a strategic move to stimulate activity and support development in this sector.
Foreign investors are also eyeing these tax incentives, which are designed to attract more foreign direct investment (FDI) amid global economic challenges. While FDI has been on the decline, these exemptions offer a chance to explore new opportunities. For instance, student accommodation and urban planning projects are areas where foreign investors might find lucrative prospects, aligning with government priorities.
CBRE's forecasts suggest that sectors like student housing could be particularly promising for foreign investors. The tax incentives are not just about immediate savings; they are about positioning for future growth in a market that is gradually stabilizing. This strategic shift could be a game-changer for those looking to invest in Cambodia's evolving real estate landscape.
Sources: The Star, B2B Cambodia, Phnom Penh Post
8) Boeung Keng Kang will attract more interest as it becomes a lifestyle hub with new cafes and boutiques
Boeung Keng Kang (BKK) district is buzzing with new cafes and boutiques, making it a lifestyle hotspot.
In 2023 and 2024, over 99 new brands entered the Cambodian market, with nearly 350 expanding their presence, including big names like Adidas and Charles & Keith in BKK1. This influx has turned the area into a vibrant hub, attracting both locals and visitors who enjoy the lively atmosphere.
People are now drawn to neighborhoods that offer a mix of living, dining, and shopping experiences. Surveys show a growing interest in lifestyle-oriented areas, and BKK is right at the center of this trend. Developments like Le Conde BKK1 and The Flora Suites are set to add even more cafes and boutiques, enhancing the district's appeal.
Media coverage has been instrumental in putting BKK on the map as a trendy destination. Articles and reports highlight its diverse retail and dining scene, while social media influencers and residents share the vibrant community vibe, making it even more attractive.
With its growing reputation, BKK is becoming a go-to spot for those seeking a lively lifestyle. The district's transformation into a lifestyle hub is evident in the bustling streets filled with new establishments and the buzz of people enjoying the scene.
As more projects and businesses set up in BKK, the district's appeal continues to rise. The combination of new developments and a thriving community atmosphere makes it a prime location for anyone looking to invest in property or simply enjoy a dynamic urban lifestyle.
Sources: Khmer Times, Realestate.com.kh
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) Luxury rental prices will dip slightly as competition increases
Phnom Penh's luxury apartment scene has exploded, with over 50,000 units completed by 2023.
Developers, especially from China, have been busy, adding thousands of condos like Dingli Sunshine City, which alone brought 650 fully furnished units to the market. This influx has created a surplus of high-end properties.
Despite fewer new projects since 2021, the city is still brimming with luxury rentals. The available space, known as Net Lettable Area, is expected to hit around 1,569,114 square meters, offering plenty of options for potential renters.
However, demand isn't keeping up. In 2023, the occupancy rate for upscale serviced apartments was a mere 41%. This mismatch between supply and demand is pushing landlords to rethink their pricing strategies.
With so many options, renters might find landlords more willing to negotiate, leading to a slight dip in luxury rental prices. This could be a great time to explore the market if you're considering a move.
Keep an eye on the market dynamics, as the competition among landlords could mean better deals for you. Luxury rental prices are expected to decline slightly due to this increased competition.
Sources: Cambodia Investment Review, Knight Frank, Cam Realty Service
10) Stricter building regulations will result in higher quality construction in new developments
Stricter building regulations are raising the bar for construction quality in new developments.
In 2023, Cambodia introduced Sub-Decree No. 50 and Prakas No. 064, which revamped licensing rules to boost transparency and stability in real estate. This means developers now have to meet more rigorous standards, leading to safer and more reliable buildings. With these changes, buyers can expect properties that are built to last.
Thanks to new safety guidelines, there's been a noticeable drop in construction-related accidents. With technical support from Australia, these guidelines are designed to create safer construction environments. When safety is a priority, the chances of structural issues go down, resulting in better quality buildings.
Take The Peak Shangri-la and The Peak Residential towers, for example. Completed in 2022, these projects highlight the benefits of following stricter regulations. They offer modern amenities and high-quality construction, making them desirable properties. This trend is echoed by experts like Davy Kong, who stress the importance of understanding and adhering to the latest real estate laws for business success.
For potential buyers, this means investing in properties that not only meet but exceed expectations. The focus on quality and safety is reshaping the landscape, ensuring that new developments are built with long-term durability in mind.
Sources: Cambodia Investment Review, Camboja News, Khmer Times
11) Young professionals will boost demand for modern, affordable housing options
Phnom Penh is buzzing with young professionals flocking to the city.
The National Career and Productivity Fair in 2024, backed by the ILO, showcased this trend by offering over 30,000 job opportunities to young Cambodians. This surge in job openings highlights the growing number of young professionals entering the workforce.
Phnom Penh's tech scene is thriving, with exciting developments in AI, blockchain, and automation. The government's "Digital Cambodia" campaign has been a magnet for multinational companies and startups, leading to a booming demand for co-working spaces and modern office facilities. Naturally, these professionals are on the lookout for modern, affordable housing options.
In the tech industry, roles like software engineers and data scientists are offering competitive salaries, ranging from $24,000 to $45,000 annually. This boost in disposable income among young professionals is driving the demand for modern and affordable housing.
Real estate reports are picking up on this trend, noting a small increase in mid-range condos that cater to the needs of these young professionals. The influx of young talent is reshaping the housing market, making it more dynamic and responsive to their preferences.
Sources: ILO, Nucamp, Realestate.com.kh
Buying real estate in Phnom Penhcan be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
12) Demand for international-standard housing will rise with the growing expatriate community
The growing expatriate community in Phnom Penh is reshaping the city's landscape.
With more international schools like the CIA First International School offering American-standard education, it's clear that Phnom Penh is becoming a hub for global families. This school is among the few in Cambodia with K3-12 International WASC accreditation, attracting expatriates who prioritize quality education for their children.
Foreign Direct Investment (FDI) is a major driver of this trend, with significant contributions from China, South Korea, and Vietnam. These investments are not just about money; they bring in professionals who need homes that meet international standards. In 2021, Chinese FDI led the way with 43%, followed by South Korea at 11% and Vietnam at 7%.
International schools like ISPP, CISP, and NISC are also part of this transformation, catering to a diverse student body and increasing the demand for high-quality housing. This demand is pushing the real estate market to develop more high-end residential projects, especially in areas like Hun Sen Blvd.
Phnom Penh's real estate market is responding to these changes with a surge in luxury housing projects. These developments are designed to meet the expectations of expatriates seeking homes with international standards and amenities.
Sources: Biz ASEAN, Compass Cambodia
13) Luxury property prices will drop in certain segments as supply exceeds demand
In 2023 and 2024, Phnom Penh's luxury property market has exploded with new options.
Thanks to several new condominium projects, thousands of luxury units have flooded the market. This has led to a noticeable increase in available inventory, making it a buyer's market. Real estate agencies are seeing this as an oversupply, which means prices aren't climbing as fast as they used to. With more properties than interested buyers, both rents and sales are taking a hit.
Occupancy rates in these high-end developments are also feeling the pressure. By the end of 2024, occupancy rates had dropped to 58.3%, a clear sign that many luxury properties are sitting empty. This trend is a red flag for potential investors, indicating that the market is saturated.
For those considering a purchase, this could mean more negotiating power and better deals. However, it's crucial to be aware of the current market dynamics. The oversupply is not just a temporary blip; it's a significant factor shaping the real estate landscape in Phnom Penh.
Insider knowledge suggests that certain luxury segments will experience a price decline as supply continues to outpace demand. This is particularly true for properties that don't offer unique features or prime locations. Buyers should be strategic, focusing on properties that stand out in this crowded market.
Understanding these trends can help you make informed decisions. Whether you're looking for a home or an investment, knowing the market's current state is key. Keep an eye on occupancy rates and price movements to gauge the best time to make your move.
Sources: Dabest Properties, Khmer Times, Phnom Penh Real Estate CBRE
14) Suburban areas will become more accessible and appealing with expanded public transportation
In 2023 and 2024, Phnom Penh is seeing a major boost in public transportation, especially with huge investments in railway development.
With over $10 billion committed by the Cambodian government, these projects aim to enhance connectivity and accessibility, particularly in suburban areas. This is part of a larger plan to stimulate economic growth and improve the overall transportation sector.
In the south of Phnom Penh, the expansion of infrastructure has already led to rising property values. This area is becoming a real estate hotspot due to its growing infrastructure and affordable land. As new transportation links, like the proposed light rail line to the new international airport, are expected to be operational by 2025, these trends are likely to continue.
The planned development of high-speed rail and expressways is set to significantly cut commute times from suburban areas to the city center. This makes suburban living more appealing, allowing residents to enjoy suburban life without losing easy access to urban amenities.
These improvements in travel efficiency are a key factor in making suburban areas more attractive for both residents and investors. The expansion of public transportation will make suburban areas more accessible and attractive.
Sources: Phnom Penh Post, Khmer Times, Construction & Property
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) Virtual reality tours will increasingly attract tech-savvy buyers in property marketing
Virtual reality tours are revolutionizing property marketing, especially for those who love tech.
In recent years, the global virtual tour market has seen a boom, with projections suggesting it could hit USD 12,345.5 million by 2033. This surge is largely due to the immersive experiences VR tours provide, which captured a significant market share back in 2023.
In Cambodia, the rise in internet and smartphone use has been a game-changer for VR adoption. With more people online and using smartphones, access to VR tours has become easier, aligning perfectly with the tech-savvy millennial crowd entering the property market.
Consumer surveys highlight a growing interest in virtual property tours. By 2023, over half of adults had experienced a virtual tour, and a notable 67% of home buyers showed a preference for listings featuring these tours.
Engagement metrics tell the story: real estate listings with virtual tours get 87% more views, and potential buyers spend more time exploring these properties online.
Sources: Market.us, DHL, PhotoUp
16) Online property platforms will become more popular as buyers and renters look for convenience
In Cambodia, internet and smartphone usage have skyrocketed in recent years.
By 2023, 11.37 million people were online, and with a mobile connection rate of 124%, it's clear that digital access is widespread. This connectivity boom means more folks are turning to online platforms for their needs, including property searches.
Take Realestate.com.kh, for example. With over 20,000 property listings, it's become a go-to for buyers and renters. The platform's popularity highlights a shift towards digital solutions, offering a vast array of options right at your fingertips.
What's driving this digital trend? A youthful population and affordable data rates are key players. As Cambodia's digital economy grows, more people are embracing online tools to find their next home, enjoying the ease of browsing detailed listings and amenities from anywhere.
The COVID-19 pandemic has also played a role, pushing more people to get comfortable with online services. This shift isn't just a temporary blip; it's a lasting change as folks continue to seek convenience and efficiency in their property hunts.
With the digital landscape evolving, online property platforms are set to become even more integral. As more buyers and renters look for hassle-free solutions, these platforms will likely see increased popularity in the coming years.
Sources: DataReportal, B2B Cambodia, Phnom Penh Post
17) Russey Keo will attract more interest for its potential in waterfront developments
Russey Keo is catching the eye of property buyers looking for waterfront developments.
With property prices in central Phnom Penh climbing, many are turning to more affordable options in Russey Keo. Developers are now focusing on mid-range and affordable housing in this area, making it a hotspot for those seeking value.
The government is also playing a big role by investing in infrastructure improvements in Russey Keo. A new cable-stayed bridge connecting Russey Keo to Chroy Changvar is nearly finished, and a flyover project is in progress to ease traffic. These upgrades will boost connectivity, making the area even more attractive for development.
Exciting announcements of new waterfront projects are adding to the buzz. The land use master plan for Khan Russey Keo highlights the area's potential for waterfront developments up to 2035, focusing on sustainable growth and infrastructure. This plan paints a bright future for Russey Keo.
Locals and investors alike are noticing these changes, and the area is poised for a transformation. With its strategic location and ongoing improvements, Russey Keo is set to become a prime spot for waterfront living.
As these developments unfold, the area is expected to see increased interest, especially from those looking for a blend of affordability and modern amenities. Russey Keo's potential is undeniable, and it's only a matter of time before it becomes a sought-after destination.
Sources: Construction Property, Real Estate Cambodia, Open Development Mekong
Don't lose money on your property in Phnom Penh
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
18) Property values in previously vulnerable areas will rise due to flood prevention initiatives
Investing in flood prevention can significantly increase property values in areas that were once prone to flooding.
Take Phnom Penh, for instance. The city has implemented the Flo-2D model, which has successfully reduced flood incidents. This makes the area safer and more appealing to homebuyers, who often prioritize flood-safe locations. As a result, demand for properties in these areas rises, pushing up prices.
Phnom Penh's commitment to flood prevention is part of its Green City Strategic Plan 2017-2026. This plan focuses on infrastructure improvements, which are expected to enhance the city's livability and attractiveness. Such improvements can make a big difference in property values, as they signal a safer and more sustainable environment.
Real estate experts, like those at CBRE, have noted that better infrastructure, such as improved drainage systems, can positively impact property prices. Even in a market facing challenges like oversupply, these enhancements can make properties more desirable.
In Phnom Penh, government investment in flood prevention is not just about safety; it's about making the city a more attractive place to live. This strategic focus on infrastructure is expected to boost property values as the city becomes more appealing to both residents and investors.
So, if you're considering buying property in Phnom Penh, keep an eye on areas benefiting from these flood prevention initiatives. They could offer great potential for value appreciation as the city continues to develop and improve its infrastructure.
Sources: Urban Flood Modeling in Phnom Penh Using Flo-2D, CBRE's 'Fearless Forecast 2024', Phnom Penh Green City Strategic Plan 2016 - 2025
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.