Is there a property bubble in Cambodia now?

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

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

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Cambodia. If you'd like to learn more about us, you can check our presentation page.

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 are property prices in Cambodia right now compared to 1, 3, and 5 years ago?

Property prices in Cambodia have undergone significant correction since their 2020 peak, with the market now showing signs of stabilization in 2025.

In Phnom Penh's high-end segment, prices dropped from $3,050 per square meter in 2020 to $2,650 per square meter as of mid-2025. This represents a 13% decline over five years, though prices have stabilized since 2024 with a modest 0.45% increase.

The nationwide price index shows Cambodia experienced its steepest declines between 2020-2023, with annual drops ranging from 2.95% to 8.10%. However, 2024 marked a turning point with the first positive growth in four years, albeit modest at 0.45%.

When adjusted for inflation, real property prices have continued declining or remained flat through 2025, indicating the market correction has been genuine rather than nominal. This pattern suggests previous price levels were unsustainable and driven by speculation rather than fundamental demand.

The current price levels reflect a more realistic valuation based on local purchasing power and genuine housing demand.

Are those price increases or decreases backed by actual sales data or just speculative listings?

The recent price movements in Cambodia's property market are supported by actual transaction data from the National Bank of Cambodia and CBRE, not speculative listing prices.

Most current growth occurs in the affordable and mid-market segments, where actual sales are taking place regularly. High-end and luxury properties continue facing oversupply issues with slow absorption rates, reflecting real market conditions rather than inflated asking prices.

Unlike the pre-pandemic boom period, current market activity is driven by end-user demand rather than speculative investment. Over 98% of recent property purchases are for owner-occupation, representing a fundamental shift from the speculation-driven market of 2018-2020.

Transaction volumes in the luxury segment remain low, with many high-end developments struggling to achieve projected sales targets. This creates downward pressure on actual selling prices, even when listing prices remain optimistic.

The data consistency across multiple sources, including government statistics and international property consultancies, confirms these trends reflect genuine market activity rather than manipulated figures.

What are current rental yields across different cities like Phnom Penh, Siem Reap, and Sihanoukville?

City	Gross Rental Yield	Net Rental Yield
Phnom Penh (Prime Condos)	6-10%	1.5-4%
Phnom Penh (Affordable)	8-12%	3-6%
Siem Reap (Tourist Areas)	7-9%	2-5%
Siem Reap (Wat Bo)	8-10%	3-6%
Sihanoukville (Otres Beach)	7.5-8.5%	2-4%
Sihanoukville (Central)	6-8%	1-3%

Is there a growing gap between property prices and rental income, and how does that compare regionally?

Cambodia's price-to-rent ratio in Phnom Penh has risen above 21, indicating it's generally more economical to rent than buy, suggesting a widening gap between property prices and rental income potential.

This ratio is higher than many regional capitals in Southeast Asia, where ratios typically range from 15-20. The elevated ratio suggests property prices have outpaced rental income growth, particularly in prime areas of Phnom Penh.

However, Cambodia still offers some of the highest rental yields in Southeast Asia, especially in tourist-dependent areas like Siem Reap and coastal Sihanoukville. These locations benefit from strong tourism recovery and foreign rental demand.

The gap is most pronounced in luxury developments where purchase prices remain elevated while rental demand stays limited. Affordable and mid-market properties show healthier price-to-rent ratios, making them more attractive for rental investors.

Regional comparison shows Cambodia's yields remain competitive despite the growing gap, with Vietnam and Thailand showing similar or worse price-to-rent ratios in their major cities.

Which areas in Cambodia are seeing the highest property price increases, and why?

Phnom Penh's satellite areas and new suburban developments are experiencing the fastest price growth, driven by infrastructure improvements and affordable housing demand.

Siem Reap's Wat Bo district shows strong price momentum due to tourism recovery and its proximity to Angkor Archaeological Park. The area benefits from both tourist rental demand and expat residential interest.

Sihanoukville's Otres Beach area continues seeing rapid development and price increases, fueled by infrastructure upgrades, casino developments, and renewed foreign investment interest despite previous Chinese investment volatility.

Mixed-use developments combining residential, commercial, and retail spaces are commanding premium prices, particularly those near planned infrastructure projects like the new Phnom Penh-Sihanoukville expressway.

Industrial park proximity drives residential demand in areas like Bavet and Poipet, where factory employment creates steady housing demand and price appreciation.

Are these price increases tied to fundamentals like infrastructure, jobs, and migration, or mainly to speculation?

Current price increases in Cambodia are primarily driven by fundamental factors rather than speculation, marking a significant shift from the pre-pandemic market dynamics.

Infrastructure development plays a crucial role, with major projects like the Phnom Penh-Sihanoukville expressway, new airports, and urban road improvements directly supporting property values in surrounding areas. These projects improve accessibility and reduce commute times, creating genuine value.

Job creation in special economic zones and industrial parks generates sustained housing demand from workers relocating for employment. Cities like Bavet, Poipet, and areas around Phnom Penh benefit from this employment-driven migration.

Urban migration from rural areas continues steadily, with young Cambodians moving to cities for education and employment opportunities. This demographic shift creates consistent demand for affordable housing rather than speculative luxury developments.

Government policies supporting first-time homebuyers and affordable housing development reinforce fundamental demand while discouraging speculative activity through targeted tax incentives and buyer qualification requirements.

What does the data say about demand—are there more people buying to live, or mostly investors flipping or holding?

Data clearly shows end-user demand dominates Cambodia's current property market, with approximately 98% of recent buyers purchasing properties for personal occupation rather than investment purposes.

This represents a dramatic shift from the 2018-2020 period when foreign investors and speculators drove much of the market activity. Current buyer profiles consist primarily of Cambodian families and individuals seeking homes, not investment returns.

Investor activity remains present but concentrated in specific segments like luxury condominiums and tourist area properties in Siem Reap and Sihanoukville. Even in these segments, many purchases are for long-term holding rather than quick flipping.

The reduction in speculative buying correlates with stricter lending practices, government policies favoring owner-occupiers, and the overall market correction that eliminated quick profit opportunities.

Foreign investment continues in regulated forms, particularly in condominium developments, but represents genuine long-term investment rather than speculative trading.

How many units remain unsold in major residential projects, and what's the current vacancy rate?

The luxury condominium segment in Phnom Penh faces significant oversupply, with over 30,000 luxury units completed in 2024 and plans for 80,000 total units by 2025.

Occupancy rates for high-end condominiums have declined from 63% in 2023 to 58% in 2024, indicating growing vacancy problems in the premium segment. This trend suggests supply has outpaced demand in luxury developments.

Over 3,200 new condominium units launched in 2024, with many remaining unsold, particularly in the high-end category where prices exceed local purchasing power. Developers are increasingly offering payment plans and incentives to move inventory.

Office space occupancy stands at approximately 65%, while retail occupancy has dropped to 61.8%, both showing year-on-year declines. These commercial vacancy rates reflect broader economic pressures and oversupply in certain segments.

Affordable and mid-market residential projects show much healthier absorption rates, with some developments achieving 70-80% sales within the first year of launch, demonstrating stronger demand in accessible price ranges.

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.

What's the level of foreign ownership or influence in the market right now, and is that rising or declining?

Foreign ownership in Cambodia's property market remains substantial but stable, with regulations allowing foreigners to own up to 70% of units in any co-owned building above ground floor level.

In luxury condominium projects, foreign buyers can represent up to 82% of purchasers, particularly in prime Phnom Penh locations and tourist areas like Siem Reap and Sihanoukville. However, this concentration in specific segments doesn't indicate rising overall foreign influence.

Recent regulatory reforms have streamlined foreign ownership registration and compliance procedures, making the process more transparent and secure for international buyers. These changes encourage legitimate investment while discouraging speculative activity.

Foreign investment remains particularly strong in special economic zones and mixed-use developments, where international businesses require housing for expatriate employees. This represents genuine economic activity rather than speculative investment.

Direct land ownership by foreigners remains prohibited, ensuring Cambodian control over the fundamental asset base while allowing foreign participation in the condominium and commercial property markets through legal frameworks.

Based on recent trends and macroeconomic indicators, where is the market heading short, medium, and long term?

Short-term outlook for 2025 shows gradual recovery continuing, especially in affordable and mid-market segments, while luxury properties will continue facing oversupply challenges.

Cambodia's robust GDP growth of 5.8% provides fundamental support for property demand, with economic expansion creating jobs and improving household incomes. This economic strength underpins sustainable market recovery rather than speculative bubbles.

Medium-term projections for 2026-2027 indicate steady price growth of 6-8% annually for condominiums, particularly in prime locations and coastal areas. This growth rate aligns with economic fundamentals and inflation expectations.

Long-term prospects remain positive due to continued urbanization, infrastructure investment, and industrial development. Cambodia's young population and improving education levels support sustained urban migration and housing demand.

Key risks include potential oversupply in luxury segments and vulnerability to global economic shocks, but the fundamentals-driven current market provides more stability than the speculation-driven previous cycle.

Is there government policy (like tax incentives or restrictions) that's inflating or deflating the market artificially?

Government policies in Cambodia are currently supporting market stability rather than creating artificial inflation, with measures designed to encourage genuine homeownership while discouraging speculation.

Tax exemptions for first-time homebuyers purchasing properties valued up to $210,000 directly support end-user demand without inflating luxury segments. This policy targets affordable housing and local buyers rather than foreign speculators.

Transfer tax relief for affordable housing projects reduces transaction costs for genuine buyers while maintaining higher costs for luxury and investment properties. This differential approach promotes market balance.

Stricter licensing requirements for developers and new frameworks for co-owned buildings improve market transparency and buyer protection, reducing speculative development and focusing on viable projects.

These policies collectively support fundamental demand while avoiding the subsidy-driven bubbles seen in other markets, creating a more sustainable growth environment for long-term market health.

If I'm a property buyer today, what strategies or locations should I consider to stay safe and profitable?

1. **Focus on infrastructure-driven locations** near planned expressways, airports, and industrial developments where job creation and accessibility improvements provide fundamental value support.2. **Target affordable and mid-market segments** priced between $50,000-$150,000, which benefit from government incentives and strong local demand while avoiding oversupplied luxury markets.3. **Prioritize realistic rental yields** seeking properties offering net returns of 2-4% after all expenses, avoiding projects promising unrealistic gross yields above 12%.4. **Choose established tourist areas** like Siem Reap's Wat Bo district or Sihanoukville's Otres Beach for rental investment, where tourism recovery supports both capital growth and rental income.5. **Ensure legal compliance** by purchasing upper-floor condominium units with clear strata titles, avoiding legal gray areas around land ownership or unclear property rights.

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. Global Property Guide - Cambodia Price History
2. Global Property Guide - Cambodia Home Price Trends
3. Phnom Penh Post - Real Estate Market Recovery
4. BambooRoutes - Cambodia Real Estate Forecasts
5. Dabest Properties - Cambodia Condo Trends
6. Global Property Guide - Cambodia Rent Yields
7. Cambodia Property Asia - Best Investment Cities
8. The Wandering Investor - Phnom Penh Real Estate Guide
9. BambooRoutes - Cambodia Investment Areas
10. Global Property Guide - Cambodia Price Rent Ratio