Buying real estate in Cambodia?

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Is there a property bubble in Cambodia now?

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Authored by the expert who managed and guided the team behind the Cambodia Property Pack

buying property foreigner Cambodia

Everything you need to know before buying real estate is included in our Cambodia Property Pack

Cambodia's property market has stabilized after years of volatility, with domestic demand now driving a fundamentally healthier market.

Property prices experienced a correction from their 2019 peaks and are now stabilizing in most areas, while rental yields remain competitive compared to regional benchmarks. Current data shows that oversupply persists in luxury segments, but affordable and mid-range properties are seeing steady demand from local buyers rather than speculative foreign investment.

If you want to go deeper, you can check our pack of documents related to the real estate market in Cambodia, based on reliable facts and data, not opinions or rumors.

How this content was created 🔎📝

At BambooRoutes, we explore the Cambodian real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Phnom Penh, Siem Reap, and Sihanoukville. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

What have property prices in Cambodia actually done over the past five to ten years?

Property prices in Cambodia experienced significant growth from 2012 to 2019, followed by a notable correction that has now stabilized.

Average condo prices in Phnom Penh doubled from approximately $1,500 to $3,000 per square meter between 2012 and 2019, representing the market's peak period driven by foreign investment and speculation.

From 2019 to 2024, Cambodia's residential market underwent a correction with prices falling by 15-20% from their peak levels. This decline resulted from oversupply issues and reduced foreign investment, particularly after the Chinese investor exodus from Sihanoukville.

As of September 2025, the residential price index showed minimal growth of just 0.45% in 2024, with some provinces outside Phnom Penh experiencing price declines after adjusting for inflation. This stabilization indicates the market has found its equilibrium after the speculative period.

Sihanoukville experienced the most dramatic price movements, with sharp drops following the Chinese investor departure, though the market is now stabilizing with some renewed local interest.

Are current rental yields realistic compared to regional benchmarks or are they inflated?

Cambodia's rental yields remain highly competitive and realistic compared to regional benchmarks, averaging 7.68% as of Q3 2025.

These yields significantly outperform most Southeast Asian capitals, with Bangkok offering 3.4% and Ho Chi Minh City providing 4.6% gross rental yields. Phnom Penh specifically delivers rental yields ranging from 5% to 8.5%, with premium properties occasionally reaching 10%.

Net yields, after accounting for maintenance costs, property management, and taxes, typically run 1.5-2% lower than gross yields but still remain attractive for investors. This gap between gross and net yields is consistent with regional standards and doesn't indicate artificial inflation.

The high yields reflect Cambodia's current market position where rental demand remains strong while property prices have corrected from their peaks, creating favorable conditions for rental investors.

It's something we develop in our Cambodia property pack.

What does the data say about actual rental demand versus empty units or oversupply?

Current data shows that rental vacancies are declining but oversupply persists primarily in the luxury segment.

Rental vacancies in new condominium projects have gradually decreased to around 15% as of September 2025, indicating that excess supply is being absorbed by the market. This improvement from higher vacancy rates in previous years demonstrates healthy market correction.

Luxury units continue to face high vacancy rates, with many high-end projects sitting empty or being converted to alternative uses. However, affordable and mid-range segments show significantly higher occupancy rates and stronger rental demand.

Domestic renters, including young professionals and families, drive most of the rental demand in affordable price ranges, while luxury properties struggle to find tenants willing to pay premium rents.

The oversupply situation is segment-specific rather than market-wide, with developers now focusing on affordable and mid-range units that align better with actual rental demand patterns.

Which areas of Cambodia show the sharpest price increases and which remain stable?

Area Price Trend Key Drivers
Phnom Penh South (New Airport Area) Sharpest increases Infrastructure development, local demand
Central Phnom Penh Stable after correction Most affordable in region, steady demand
Sihanoukville Stabilizing Recovery from Chinese investor exodus
Kampot & Kep Stable, attractive pricing Lifestyle buyers, expat interest
Koh Rong Stable opportunities Tourism potential, development projects
Siem Reap Moderate growth Tourism recovery, local buyers
Coastal provinces Stable with potential Infrastructure improvements

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Is most of the buying driven by local demand or by foreign investors chasing quick profits?

Local demand now dominates Cambodia's property market, with 98% of recent purchases made by owner-occupiers rather than speculative investors.

Current sales are primarily driven by Cambodians buying homes to live in, representing a fundamental shift from the foreign speculation that characterized the market from 2015 to 2019. This change reflects a healthier, more sustainable market structure.

Foreign speculation has become minimal due to strict regulations and changing market conditions that have reduced opportunities for investment flipping. The days of cash-rich international buyers driving rapid price increases are essentially over.

Southeast Asian regional buyers represent some ongoing interest, but their impact on the market is limited compared to domestic demand. These buyers typically focus on long-term investments rather than quick profit strategies.

The shift to local demand provides market stability and ensures that property values align more closely with Cambodia's economic fundamentals and local purchasing power.

What role do bank lending practices and mortgage availability play in pushing prices up?

Cambodia's banking sector maintains cautious lending practices that help prevent excessive leverage from fueling unsustainable price increases.

Developers have adapted to local market conditions by offering flexible payment plans and products suitable for domestic buyers, including longer payoff options that support genuine demand rather than speculation. These arrangements help bridge the gap between local incomes and property prices.

Mortgage offerings exist in the Cambodian market but are not the dominant financing mechanism compared to cash purchases and developer financing schemes. This limits the potential for credit-fueled price bubbles that have affected other markets.

The banking sector's conservative approach to property lending, combined with regulatory oversight, helps maintain market stability and prevents the excessive leverage that can lead to price bubbles.

Current lending practices support sustainable growth by ensuring that buyers have genuine ability to service their debts, rather than enabling speculative purchases based on unrealistic expectations of future price appreciation.

Are construction and new project launches aligned with real population and income growth?

New construction projects have realigned with Cambodia's economic fundamentals, focusing on affordable and mid-range housing that matches local demand.

Most new launches now target domestic buyers and actual usage rather than speculative investment, with developers shifting away from luxury projects toward affordable and mid-range units that align with population and income growth patterns.

Cambodia's GDP growth of around 5.8% supports current construction levels and helps ensure that new supply matches economic expansion and urbanization trends. This alignment reduces the risk of creating additional oversupply in segments where demand is limited.

Luxury oversupply remains a concern as existing high-end projects continue to seek buyers, but new construction in this segment has decreased significantly. Developers have learned from the oversupply issues of previous years.

It's something we develop in our Cambodia property pack.

How sustainable are these price levels given Cambodia's economic fundamentals?

Current property price levels appear sustainable based on Cambodia's economic fundamentals and the market's transition to domestic demand.

Cambodia's GDP growth of approximately 5.8% provides solid economic support for current demand and price levels, particularly in affordable and mid-range segments where local buyers are active. This growth rate indicates sufficient economic expansion to support property market activity.

The risk of a property bubble appears low due to market stabilization, with most current activity being demand-driven rather than speculative. The correction from 2019 peaks has brought prices more in line with local economic conditions.

Luxury segment prices face continued downward pressure due to oversupply, but this affects a limited portion of the overall market. The broader market's focus on affordable housing aligns better with economic fundamentals.

The transition from foreign speculation to domestic demand creates a more sustainable foundation for price levels, as local buyers must consider their actual income and housing needs rather than investment returns.

infographics rental yields citiesCambodia

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.

Are government policies, taxes, or regulations fueling the market or trying to cool it down?

Cambodian government policies prioritize stable growth and homeownership for locals rather than encouraging speculation or implementing cooling measures.

Current policies support homeownership for Cambodians while maintaining regulations that limit foreign speculation. No major taxes or cooling measures have been introduced that would cause sharp price corrections, indicating government satisfaction with current market conditions.

Ownership laws allow foreigners to purchase strata titles (condominiums) in most projects but prohibit ownership of landed property, which helps ensure domestic dominance in the residential market. This regulatory framework supports local buyers while allowing some foreign investment.

The government's approach focuses on sustainable growth rather than rapid price appreciation, avoiding policies that might fuel speculative bubbles while ensuring that locals can access affordable housing.

Regulatory stability provides confidence for both local buyers and long-term foreign investors, while discouraging short-term speculation that could destabilize the market.

What do independent analysts and data sources say compared to rumors on the street?

Independent analysts confirm that Cambodia's property market recovery and price stabilization are driven by real demand and structural factors rather than speculation.

Professional market analysis supports the view that current price levels reflect genuine market conditions, with little basis for rumors of property bubbles or runaway speculation. The data shows a market in transition from speculation to fundamentals.

Vacancy and oversupply risks persist in specific luxury segments but analysts emphasize that these issues are not system-wide problems affecting the broader market. The distinction between segment-specific issues and market-wide problems is crucial for understanding current conditions.

Street rumors often focus on dramatic stories from the speculative period (2015-2019) or isolated luxury projects, while comprehensive market data shows a more balanced and stable situation across most price segments.

Analysis consistently shows that domestic demand, realistic pricing, and improved developer practices have created a healthier market structure than existed during the peak speculation years.

If you are a buyer now, what strategies can reduce risk and still capture opportunities?

  1. Focus on affordable and mid-range properties: Target units priced for local buyers rather than speculative luxury segments where oversupply remains a significant risk.
  2. Prioritize areas with actual rental demand: Choose locations with strong occupancy rates and established tenant bases, particularly near business districts, universities, and transportation hubs.
  3. Target emerging districts with infrastructure development: Areas like Phnom Penh's south (new airport vicinity) offer growth potential supported by concrete development projects.
  4. Consider coastal opportunities: Underdeveloped areas like Kampot, Kep, and Koh Rong provide attractive pricing for lifestyle buyers and long-term appreciation potential.
  5. Verify project fundamentals: Thoroughly check occupancy rates, developer reputation, legal status, and actual rental demand before purchasing, especially for condominium units.

What are the short, medium, and long-term prospects for Cambodia's property market?

Cambodia's property market prospects show stability in the short term with growth potential linked to infrastructure development and economic expansion.

Short-term prospects (2025-2026) include continued price stability and healthy rental yields, with domestic demand driving absorption of oversupply in affordable segments. The market has found its equilibrium after years of correction.

Medium-term outlook (2026-2030) anticipates infrastructure projects including the new airport and improved road networks will support new hotspots and gradual market expansion. Economic growth should continue supporting domestic demand while new supply aligns better with actual needs.

Long-term prospects (2030+) include continued market formalization and growth as Cambodia's economy develops, though luxury oversupply will require time for full absorption. Market fundamentals and cautious lending practices should prevent future bubble conditions.

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.

Sources

  1. IPS Cambodia - Phnom Penh Condo Market Trends 2025
  2. Global Property Guide - Cambodia Price History
  3. IPS Cambodia - Siem Reap Market Trends 2025
  4. B2B Cambodia - Real Estate Mid-Year Review 2025
  5. BambooRoutes - Property Bubble Cambodia
  6. Global Property Guide - Cambodia Rental Yields
  7. Cambodia Condo For Sale - Rental Yield Investment Potential
  8. Statista - Cambodia Real Estate Outlook