Phnom Penh is the largest city in Cambodia by population and the country’s humming commercial centre.
First founded as the capital of the Khmer nation in the 15th century, Phnom Penh has a unique and tumultuous history, with cultural ties across Southeast Asia. Cambodia was a colony of France from 1863 to 1953, and today, French influences manifest across the capital in architecture, landscaping, and cuisine.
The country is slightly behind some of its Southeast Asian neighbours in terms of development. This is largely due to the political and economic disruption caused by the Khmer Rouge regime during the 1970s. However, Cambodia is now developing quickly, and Phnom Penh is a city on the rise.
One of the fastest growing economies
After achieving lower middle-income status in 2015, the country aims to attain upper middle-income status by 2030. And it is well on its way to doing so.
Cambodia had one of the fastest growing economies before the pandemic with a growth of 7.7% between 1998 and 2019. The economy grew 3% in 2021, signalling the start of a strong recovery.
The Asian Development Bank (ADB) has forecast a 5.3% increase in 2022, with the service sector—encompassing tourism, transport and telecom, trade, and real estate—rising 4.8% by the end of the year.
Furthermore, the ADB expects economic growth to reach new heights in 2023, with an increase of 6.5 per cent.
Real estate in Phnom Penh, Cambodia
Let’s start with a significant moment in Cambodia’s property market history. In 1989, a law was passed that permitted citizens to buy and sell real estate for the first time. This naturally led to an upstart in investment and development in urban areas—particularly in the capital city of Phnom Penh.
Over the past few years, Cambodia’s real estate market has seen significant growth. This has been fuelled by the country’s expanding middle class, as well as foreign buyers across Asia, Australia, Europe, and the US.
As of August 2022, the median sales price for residential Phnom Penh property was $190,000 (Realestate.com.kh). Properties in this area are by far more popular than anywhere else in the country.
The average price per square meter for apartments in the city centre is $2,339.50, and $1,625.83 outside of the city centre, according to Numbeo. In comparison, prices in Bangkok sit at $4,982.15 (city centre) and $2,389.40 (outside of the city centre). Phnom Penh property is therefore much more affordable than in Bangkok, as well as other Southeast Asian capitals. With one of the most expensive real estate markets in the world, city-centre property in Singapore will cost you a mammoth $19,051.61 per sqm.
Both Thailand and Singapore are hailed as “success stories” in terms of development. Singapore ranked first in the 2022 Index of Economic Freedom and is considered one of the most prosperous countries in the world. Thailand moved from a low-income to an upper-middle-income country in less than a generation, and with its rapid progress came an increase in property prices.
In line to follow a similar path, Cambodia has the potential to become the next rising star of Southeast Asia—and investors have been quick to notice this.
Recent developments
Property in Cambodia saw increased interest in the first half of the year. Additionally, over $30 million in property was sold at the recent Realestate.com.kh Expo in July.
Major construction projects include new roads, bridges and two international airports designed to facilitate tourism.
It would seem that the capital has a bright and exciting future ahead. With so much potential, and investment opportunities across a range of markets, we think that Phnom Penh is one to watch.
Contact us today to discuss property investment opportunities.
