Cambodia's residential real estate market remains sluggish despite improving economic conditions.

Table of Contents

• Housing Market Snapshot
• Historic Perspective
• Supply Highlights
• Rental Market
• Mortgage Market
• Socio-Economic Context

Housing Market Snapshot

During 2024, the nationwide residential property price index (RPPI) increased by a meager 0.45% from a year earlier, following an annual decline of 2.95% in 2023, based on figures from the National Bank of Cambodia (NBC). However, when adjusted for inflation, prices actually fell by 2.52% last year. Quarter-on-quarter, residential prices in Cambodia were down by 0.41% (-1.84% inflation-adjusted) in Q4 2024.

Cambodia's house price annual change

By location:

• In Phnom Penh, the RPPI increased by 1.72% in 2024 from a year earlier but declined by 1.29% in real terms. Quarterly, prices were down by 1.35% (-2.77% inflation-adjusted) in Q4 2024.
• In other provinces, the index was down by 4.65% y-o-y (-7.47% inflation-adjusted) last year. But quarter-on-quarter, prices increased by 3.79% (2.3% inflation-adjusted) in Q4 2024.

The continued weakness of the residential market is supported by figures from CBRE Cambodia, which showed that the average price of high-end condominium units in Phnom Penh fell by 2.21% to US$2,650 per square meter (sqm) in 2024 from a year earlier. When adjusted for inflation, condo prices were down by 5.11% last year.

Quarterly, high-end condo prices in the capital dropped by 2.36% (-3.6% inflation-adjusted) in Q4 2024.

Phnom Penh's real estate market is projected to remain subdued this year, as investment into construction projects in the country has not yet fully recovered, according to Marc Townsend, Chairman of CBRE Cambodia.

Yet Cambodia's overall economy continues to gather pace. 2024, the economy grew by a robust 5.5% during 2024, according to the IMF, its best showing in the past five years. This followed economic expansions of 5% in 2023, 5.1% in 2022, and 3.1% in 2021 and a pandemic-induced contraction of 3.6% in 2020.

From 2011 to 2019, the Cambodian economy expanded by an average of 7.2% per year, fuelled by strong tourism, garment manufacturing, and agriculture.

The IMF expects the Cambodian economy to grow by a stronger 5.8% this year. In fact, the country's Department of Ministry and Finance and the Asian Development Bank (ADB) are even more optimistic, projecting real GDP growth rates of 6.3% and 6%, respectively.

Historic Perspective:

Housing market cycle

Cambodia's housing market enjoyed unprecedented price rises from 2004 to 2007, with property prices rising by about 25% to 40% annually. Land price increases were at first confined to Phnom Penh, Siem Reap, and Sihanoukville, but the boom spread right across Cambodia. Other hot spots were the border areas with Vietnam and Thailand and, to a lesser extent, Laos.

Residential land prices in Phnom Penh soared to KHR6.25 million (US$1,557) per sq. m. in 2007, from KHR2.34 million (US$583) per sq. m. in 2006. The government is aggressively pro-development, and squatters and other eyesores are simply cleared away, by a government that is in league with wealthy developers.

In mid-2008, the bubble burst, because South Korea, one of the country's biggest investors, was badly hit by the global economic and financial crisis. Investments in real estate developments fell from US$3.19 billion in 2008, to US$1.99 billion in 2009, and finally to just US$840 million in 2010, according to the Ministry of Land Management, Urban Planning, and Construction. By end-2010, land values in Phnom Penh, the capital, were about 40% to 50% down on their peak values in mid-2008.

The market started to recover in 2011, buoyed by strong economic growth and by the new foreign ownership law. In Phnom Penh, the average condo sales price more than doubled from 2012 to 2019, from US$1,460 to US$3,184 per sq. m.

The housing market started to cool in 2019 due to the supply glut. Then COVID-19 aggravated the situation, causing condo sales prices to fall by 6.2% (-8.8% inflation-adjusted) in 2020.

The housing market has been generally weak since, with condo sales prices in Phnom Penh falling further by 8.1% (-11.4% inflation-adjusted) in 2021 and by 5% (-7.6% inflation-adjusted) in 2022. After a short-lived recovery in 2023, condo sales prices dropped again by 2.2% (-5.1% inflation-adjusted) in 2024.

Wide variations in land prices in Phnom Penh

Land prices in Phnom Penh vary widely. During 2024, the average land prices in major districts in the capital were as follows, based on figures from CBRE Cambodia:

• 7 Makara District, consisting of the communes of Mittapheap, Monourom, Ou Ruessei Ti Buon, Ou Ruessei Ti Bei, Ou Ruessei Ti Pir, Ou Ruessei Ti Muoy, Boeng Proluet, and Veal Vong, has the most expensive land in the capital, with prices ranging from US$4,500 to US$8,500 per sqm.
• In Sen Sok District, which includes Khmuonh, Krang Thnong, Phnom Penh Thmei, Kouk Khleang, Tuek Thla, and Ou Baek K'am, land prices ranged from just US$300 to US$2,500 per sqm.
• In Toul Kork District, consisting of Boeng Kak Ti Muoy, Boeng Kak Ti Pir, Tuek L'ak Ti Muoy, Phsar Depou Ti Bei, Phsar Depou Ti Pir, Tuek L'ak Ti Pir, Phsar Depou Ti Muoy, Tuek L'ak Ti Bei, Phsar Daeum Kor, and Boeng Salang, land prices ranged from US$2,500 to US$6,500 per sqm.
• In Boeung Keng Kang District, consisting of the communes of Tuol Svay Prey Ti Muoy, Tuol Svay Prey Ti Pir, Olympic, Boeng Keng Kang Ti Muoy, Boeng Keng Kang Ti Pir, Boeng Keng Kang Ti Bei, and Tumnob Tuek, land prices ranged from US$2,500 to US$7,500 per sqm.
• In Chamkarmon District, which includes the communes of Tuol Tumpung Ti Muoy, Tuol Tumpung Ti Pir, Boeng Trabaek, Phsar Daeum Thkov, and Tonle Basak, residential lots are offered from US$2,000 to US$5,500 per sqm.
• In Chroy Changvar District, which consists of Bak Kaeng, Preaek Ta Sek, Chrouy Changvar, Preaek Lieb, and Kaoh Dach, residential lots are sold for low prices ranging from just US$200 to US$2,500 per sqm.
• In Dangkao District, consisting of Dangkao, Prey Sa, Prey Veaeng, Pong Tuek, Cheung Aek, Spean Thma, Sak Sampov, Krang Pongro, Kong Noy, Tien, Roluos, and Preaek Kampues, land prices are affordable at US$120 to US$800 per sqm.
• In Daun Penh District, which includes Srah Chak, Voat Phnum, Phsar Thmei Ti Muoy, Phsar Chas, Phsar Kandal Ti Muoy, Phsar Kandal Ti Pir, Phsar Thmei Ti Bei, Phsar Thmei Ti Pir, Boeng Reang, Chey Chumneah, and Chakto Mukh, land prices are relatively high, ranging from US$3,000 to US$8,500 per sqm.
• Kamboul District, which consists of Snaor, Ovlaok, Kamboul, Kantaok, Phleung Chheh Roteh, Prateah Lang, and Boeng Thum has some of the most affordable land in the capital, with prices ranging from just US$50 to US$400 per sqm.
• In Mean Chey District, consisting of Stueng Mean Chey 1, Stueng Mean Chey 2, Stueng Mean Chey 3, Boeng Tumpun 1, Boeng Tumpun 2, Chak Angrae Leu, and Chak Angrae Kraom, land prices ranged from US$900 to US$3,500 per sqm.
• In Pou Senchey District, which consists of Kakab 1, Kakab 2, Samraong Kraom, Chaom Chau 1, Chaom Chau 2, Chaom Chau 3, and Trapeang Krasang, land prices ranged from US$250 to US$1,800 per sqm.
• In Russey Keo District, which includes the communes of Svay Pak, Chrang Chamreh Ti Muoy, Chrang Chamreh Ti Pir, Kilomaetr Lekh Prammuoy, Ruessei Kaev, Tuol Sangkae 1, and Tuol Sangkae 2, residential lots are offered for about US$600 to US$1,800 per sqm.
• Praek Pnov District, which consists of Pongsang, Ponhea Pon, Samraong, Preaek Pnov, and Kouk Roka, has one of the cheapest land in the capital, with prices ranging from just US$40 to US$650 per sqm.
• In Chbar Ompov District, which includes Chhbar Ampov Ti Muoy, Chbar Ampov Ti Pir, Nirouth, Veal Sbov, Preaek Aeng, Kbal Kaoh, Preaek Thmei, and Preaek Pra, residential lots are priced from US$120 to US$2,500 per sqm.

Supply Highlights:

Residential supply continues to increase

The total residential supply for both condominium units and landed properties continues to increase. During 2024, the total condominium supply in Phnom Penh reached about 72,000 units, up by almost a quarter from around 57,000 units in the prior year.

More than half of these are mid-range condominium units. Affordable condo units accounted for about 30% share of the total supply while the remaining 15% consisted of high-end units.

The total condominium supply in the capital city is projected to breach the 80,000 mark, based on a forecast released by CBRE Cambodia.

Likewise, the supply of landed property in Phnom Penh is also increasing. During 2024, the total number of landed properties reached nearly 167,000 units, up by 5% from a supply of 159,000 units in the previous year.

The affordable segment made up approximately 50% of all landed properties in the capital, while the mid-range market represented 44%, and the high-end segment comprised the remaining 6%.

CBRE Cambodia expects the total supply of landed properties in Phnom Penh to increase further to about 182,000 units this year

However, conflicts in landed property projects remain a challenge. "The conflicts between the developers and homebuyers are anticipated to persist, due to the ongoing delay of construction and seizure of properties, primarily within affordable boreys. This may require further mediation and intervention from the relevant authorities," said the CBRE report.

Rental Market:

Attractive rental yields, improving rental market

Cambodia has very attractive gross rental yields. In Q1 2025, gross rental yields for apartments ranged from 7.13% to 8.16%, with a national average of 7.4%, according to a recent study conducted by the Global Property Guide.

By major areas:

• In Phnom Penh, apartments offer rental yields ranging from 5.01% to 8.5% in Q1 2025, with a city average of 6.96%.
• In Kep and Kampot, gross rental yields ranged from 6.6% to 8.79% in Q1 2025, with an area average of 7.88%.
• In Chroy Changvar, apartments earn rental yields from 5.35% to 7.56%, with an area average of 6.82%.
• In Koh Rong and Koh Rong Samloem, gross rental yields ranged from 5.74% to 7.82%, with an area average of 7.11%.

This was supported by Invest Asian, noting that rental yields in Phnom Penh, especially for older shophouse apartments, is the second highest in Asia next to Jakarta, at above 6%.

"Cambodia's economic growth is equally impressive as their rental yields. Like many other frontier markets, Cambodia's record of avoiding recessions is strong. They skipped the tech-bubble of the 2000s along with the 2008 crisis," said Invest Asian.

"Predicting capital appreciation is hard. But we think Phnom Penh's property market has better growth prospects compared to just about anywhere else in Asia," added Invest Asian.

Phnom Penh is home to about 150,000 expats, most of whom are employed as teachers, NGO workers, officers of multinational companies, or embassy staff. Nearly all live in rental properties.

However, during the onset of the Covid-19 pandemic, rental demand fell sharply, particularly from foreigners and expats. This led to high vacancy rates, currently at about 30% to 50% during the said period, said CBRE Cambodia Managing Director Ann Sothida.

In the past two years, there were signs of a gentle recovery in rental demand.

"Pricing-wise there has been a drop off in the high-end condos and a small increase in mid-range condos in Phnom Penh, while the rental market has experienced a slight uptick for all categories except the affordable range. Serviced apartment rents are also slightly up in 2024 Y-o-Y," said CBRE.

Currently, one-bedroom apartments in Phnom Penh are currently offered for an average monthly rent of US$550 per month, according to Global Property Guide. Two-bedroom apartments in the capital city are rented for an average of US$1,000 per month; three-bedroom apartments for US$1,800 per month; and four and more bedroom apartments for US$4,500 per month.

Foreign homeownership rules

Under the Foreign Ownership Property Law of April 2010 foreigners can own apartments and condominium units, but not land, and therefore not the first floor of buildings. Also, foreign investors are allowed to own up to 70% of a condominium project.

In 2005, the Cambodian government amended its investment law to allow foreign ownership of buildings. However, the law was not then implemented and the idea floundered.

Land ownership is against the Constitution and is still out of the question. Land can however be held by foreigners on long (renewable) leases and through majority locally-owned companies incorporated in Cambodia. These structures are argued by lawyers in Cambodia to be safer than legal schemes in any other South East Asian country in which foreign land ownership is formally prohibited.

The majority of foreign homebuyers in Cambodia, especially in Phnom Penh, come from China, Hong Kong, Malaysia, and Singapore. Phnom Penh is home to almost half of expats residing in the country. Other sought-after destinations for real estate investment in Cambodia included Siem Reap, Sihanoukville, Battambang, and Kampot.

Mortgage Market:

Mortgage market slowing

Mortgages and housing loans were introduced to the real estate sector only in 2008. The size of the mortgage market rose from less than 1% of GDP in 2009 to about 16.8% of GDP in 2022. However, it noticeably slowed in the past two years - to 16% of GDP in 2023 and finally to 14% of GDP in 2024.

Total outstanding mortgages (owner-occupied housing only) stood at KHR 27.03 trillion (US$ 6.77 billion) in 2024, down by 5% from a year earlier, according to the National Bank of Cambodia (NBC). It was the first annual contraction seen since mortgage loans were introduced in the country 16 years ago.

From more than 40% annual growth from 2010 to 2022, mortgage market growth slowed sharply to just 3.3% in 2023 before declining last year.

The weakness of the market continues this year, with housing loans falling further by 3.5% y-o-y to KHR 26.81 trillion (US$6.71 billion) in January 2025.

Interest rates stabilizing

Interest rates in Cambodia have stabilized in recent years, mainly due to

For new term loans:

• KHR-denominated term loans: the weighted average lending rate was 11.32% in December 2024, hardly changed from 11.4% in December 2023 and 10.88% in December 2022, based on figures from the NBC.
• USD-denominated term loans: the weighted average lending rate stood at 9.39% in December 2024, from 9.78% in the previous year and 9.1% two years ago.

For outstanding term loans:

• KHR-denominated term loans: the average interest rate was 11.4% in December 2024, from 11.32% a year earlier and 10.62% two years ago.
• USD-denominated term loans: the average interest rate was 9.87% in December 2024, slightly up from 9.75% in December 2023 and 9.22% in December 2022.

Socio-Economic Context:

Economic conditions continue to improve, inflation increasing again

Cambodia's economy grew by a robust 5.5% during 2024, according to the IMF, its best showing in the past five years. This followed economic expansions of 5% in 2023, 5.1% in 2022, and 3.1% in 2021 and a pandemic-induced contraction of 3.6% in 2020.

"Real GDP growth is driven mainly by external demand, with a strong rebound in garment exports and high growth in agricultural exports," said the IMF. "Tourism has experienced a structural shift in its composition, resulting in a lagged recovery in tourism receipts."

The IMF expects the Cambodian economy to grow by a stronger 5.8% this year. In fact, the country's Department of Ministry and Finance and the Asian Development Bank (ADB) are even more optimistic, projecting real GDP growth rates of 6.3% and 6%, respectively.

"The rebound in the manufacturing sector - especially garments, footwear, and travel goods (GFT) - is powering the country's economic growth," said ADB Country Director for Cambodia Jyotsana Varma. "Agriculture and tourism are steadily gaining ground, while continued inflows of foreign direct investment are fueling the country's economic momentum."

Cambodia saw strong, uninterrupted growth for most of the past two decades. From 2000 to 2003, the economy grew by an average of 8.3%, and then by an average of 11.1% from 2004 to 2007. After a slight pause during the global crisis, from 2011 to 2019, the economy expanded by an average of 7.2% per year, fuelled by strong tourism, garments manufacturing, and agriculture.

Cambodia was upgraded by the World Bank from a low-income to a lower-middle-income economy in August 2016. Cambodia's GNI per capita stood at US$1,690 in 2017, and increased to US$2,100 in 2019, but declined slightly to US$2,050 in 2020 due to the adverse effects of the Covid-19 pandemic. The country's GNI per capita is now currently around US$2,390.

Cambodia's GDP per capita, at current prices, is higher, at US$2,744 in 2024, based on IMF figures.

The country's poverty rate has fallen from 47.8% in 2007 to 12.9% in 2018, driven substantially by rising labor earnings. However, poverty has increased during the onset of the pandemic, with more than 710,000 households receiving cash transfers in January 2021 while only 560,000 households were eligible in 2020. This means that at least 150,000 households or 500,000 Cambodians were considered as newly poor. As such, the poverty rate increased back to about 18% during the pandemic.

Then the surge in energy and food prices driven by the Russian-Ukraine conflict placed further strain on household budgets.

The expansion of social assistance for poor and vulnerable households has helped cushion income losses. However, poverty levels remain elevated compared to pre-pandemic figures. With improving economic conditions, employment opportunities continue to increase and poverty is projected to gradually decline in the coming years.

Yet inflationary pressures are rising again. Inflation surged to 6% in January 2025, sharply up from 3.05% in the previous month and -0.5% in the same period last year, according to the National Bank of Cambodia. It was the highest level seen since June 2022.

Despite the recent surge, inflation is projected to remain manageable at about 2.1% this year, according to IMF forecast.

From an annual average of 11.3% from 2005 to 2008, inflation declined to just 2.8% annually from 2009 to 2021. After accelerating to 5.3% in 2022, growth in consumer prices eased again to 2.1% in 2023 and 0.7% in 2024.

Capital gains tax's implementation delayed further until end-2025

A new capital gains tax for individuals, set at a flat rate of 20%, was introduced into law in April 2020 through Prakas 346. It will apply to all properties and other capital investments such as leasing, stocks as well as foreign currency.

Taxpayers shall be required to file their capital gains tax return and pay the tax to the General Department of Taxation (GDT) within three months of realizing the gain.

The law was intended to take effect in July 2020 but due to the pandemic, its implementation has been postponed several times - first to January 2021, then to January 2022, and then to January 2024. Most recently, it was delayed again by the Royal Government of Cambodia (RGC) until the end of 2025.

The new capital gains tax, when implemented, is expected to further weaken the already ailing property market.

First-time homebuyers to enjoy tax incentives

To boost the real estate market, the government introduced a tax incentive for first-time homebuyers. Approved by the Ministry of Economy and Finance on December 31, 2024, this program offers tax exemptions on title transfers for those buying their first landed property (Borey) or condominium.

Tourism growing strongly

During 2024, there were about 6.7 million international tourist arrivals in Cambodia - a huge increase of 22.9% as compared to the 5.45 million arrivals recorded in the previous year. In fact, it has now surpassed the previous record of 6.61 million arrivals set in 2019, before the pandemic.

Likewise, gross tourism receipts reached US$3.63 billion in 2024, up by 17.8% from US$3.08 billion in 2023, according to the Ministry of Tourism.

Thailand accounted for 32% of the total tourist arrivals last year, followed by Vietnam (20%), China (12.7%), Laos (5%), United States (3.2%) and South Korea (2.9%). Collectively, these six countries accounted for more than three-fourths of all international tourist arrivals in Cambodia in 2024.

Siem Reap, home to the iconic Angkor Wat temple complex, remains the top destination, alongside Phnom Penh and the coastal provinces of Preah Sihanouk and Kampot. The revival of international flights, improved infrastructure, and promotional efforts by the government have played key roles in boosting tourism in recent years.

With new tourism campaigns and further infrastructure upgrades planned, tourism is projected to maintain strong momentum this year, with the government aiming for 7.5 million tourist arrivals.

"Tourism, a key pillar of Cambodia's economy, is poised for a strong recovery in 2025, benefiting from government incentives and improved infrastructure. Cambodia aims to attract 7.5 million international tourists in 2025, following a successful 2024 with 6.7 million visitors," said a recent article by ASEAN Briefing.

"Tourism currently contributes approximately 12% of Cambodia's GDP, and this figure is expected to grow as international arrivals increase and tourism infrastructure expands," added the said article.

Garments industry continues to expand

Cambodia's garment industry is a cornerstone of its economy, playing a pivotal role in employment and export revenues. The garments sector is the country's largest foreign exchange earner. It consists of about 1,100 factories and branches, employing around 800,000 workers. In fact, Cambodia is the world's eighth-largest exporter of apparel and footwear, with the textile and apparel sector contributing over one-third of the nation's GDP.

In 2024, garment exports experienced a substantial increase, with earnings reaching nearly US$12 billion, accounting for almost 45% of the country's total export income. This growth represents a 24.4% rise compared to previous year, highlighting the sector's resilience and expanding global demand.

Accordingly, the strong growth in exports last year was driven by several factors, including the rebound of tourism boosting demand for clothing, bags, and shoes; lower stock levels from suppliers in 2022-2023; and reduced production in some major exporting countries due to political problems.

Cambodia's garment exports are largely dependent on demand from key markets, including the US, Canada, the EU, and several Asian nations.

"The production capacity and increased demand in international markets have led to significant growth in Cambodia's garment export value in 2024. If the global political and economic situation improves in 2025, Cambodia's garment export value will continue to rise," said Hong Vanak, an economist at the Royal Academy of Cambodia.

Sources:

• Market Insights Q1 2024 (CBRE Cambodia): https://cbre.com.kh/
• Average Land Price In Phnom Penh H2 2024 (CBRE Cambodia): https://cbre.com.kh/
• 2025 Fearless Forecast (CBRE Cambodia): https://cbre.com.kh/
• Phnom Penh real estate market to remain flat in 2025 (Khmer Times): https://www.khmertimeskh.com/
• Cambodia's tourism makes 3.63 bln USD revenue in 2024 (Xinhua): https://english.news.cn/.
• Gross rental yields in Cambodia: Phnom Penh and 3 other locations (Global Property Guide): https://www.globalpropertyguide.com/
• Cities With the Highest Rental Yields in the World (Invest Asian): https://www.investasian.com/
• With Cambodia's Property Market Showing Signs Of Growth in 2025 - What Property Types Can You Consider Investing In (Realestate.com.kh): https://www.realestate.com.kh/
• CBRE Market Insights Q3 2024 - Property Market is Flat But Optimism Over Economic Growth (B2B Cambodia): https://b2b-cambodia.com/
• Cambodia: Corporate - Significant developments (PWC): https://taxsummaries.pwc.com/
• First-Time Home Buyers to enjoy tax incentives in 2025 (CBRE Cambodia): https://cbre.com.kh/
• Cambodia: Capital Gains Tax Officially Delayed to 2024 (DFDL): https://www.dfdl.com/
• Cambodia Delays Capital Gains Tax to 2024: Impact for Businesses and Individuals (ASEAN Briefing): https://www.aseanbriefing.com/
• How to Buy Property in Cambodia as a Foreigner (Global Property Guide): https://www.globalpropertyguide.com/.
• Interest rate (National Bank of Cambodia): https://www.nbc.gov.kh/
• Cambodia interest rate (Trading Economics): https://tradingeconomics.com/
• Monetary and Financial Statistics Data (National Bank of Cambodia): https://www.nbc.gov.kh/
• Cambodia (International Monetary Fund): https://www.imf.org/
• IMF Executive Board Concludes 2024 Article IV Consultation with Cambodia (International Monetary Fund): https://www.imf.org/.
• Cambodia's 2025 Economic Outlook and Investment Opportunities for Foreign Investors (ASEAN Briefing): https://www.aseanbriefing.com/
• Cambodia's economy to grow by 6.3 pct this year: official (Khmer Times): https://www.khmertimeskh.com/
• ADB Maintains Cambodia's Growth Forecast for 2024-2025 (Asian Development Bank): https://www.adb.org/
• Cambodia is now a lower-middle-income economy: What does this mean? (World Bank): https://blogs.worldbank.org/
• GNI per capita, Atlas method (current US$) - Cambodia (World Bank): https://data.worldbank.org/
• Covid-19 Economic and Social Impact Assessment in Cambodia (United Nations Development Programme): https://www.undp.org/
• Cambodia Inflation Rate Phnom Penh (Trading Economics): https://tradingeconomics.com/
• Garments account for 45% of exports in '24, up almost a quarter (The Phnom Penh Post): https://www.phnompenhpost.com/