Buying Property in Phnom Penh: 7 Facts Every Investor Must Know in 2026

In 2024, the average price per square metre in a new condominium in central Phnom Penh stood at approximately 2,400 USD. For context, Bangkok averaged 4,800 USD/m² and central Warsaw exceeded 4,200 USD/m². Cambodia's capital remains one of the most affordable capital-city markets in Southeast Asia, and it offers something no other country in the region provides: full dollarisation of the economy.

For international investors, this carries a clear implication. You buy in USD, rent in USD, and sell in USD. There is no currency conversion risk tied to local currency volatility. The only exchange rate exposure is against your home currency, which you track regardless.

Phnom Penh has a population of over 2.4 million residents (National Institute of Statistics). The city grows at roughly 3.5% per year, driven by rural-to-urban migration and an expanding middle class. Cambodia's GDP grew by an estimated 5.8% in 2025 (World Bank projection), with real estate accounting for close to 9% of gross domestic product.

Quick answer

• Entry price: a studio of 28-35 m² in a new condominium costs 65,000 to 95,000 USD in central districts (BKK1, Tonle Bassac, Toul Kork)
• Gross rental yield: 6-9% per year, depending on location and specification - materially above the 3-5% typical of Bangkok
• Transaction currency: 100% USD - no conversion to local currency required
• Foreign ownership: full freehold title (hard title / strata title) is available exclusively from the first floor and above - ground floor units and land are reserved for Cambodian nationals
• Transfer tax: 4% of property value, paid by the buyer
• Travel: no direct long-haul flights from most Western cities - convenient connections via Dubai, Bangkok, or Kuala Lumpur; total journey time 14-18 hours

Options and scenarios

Scenario 1: Conservative long-term rental

An investor acquires a 32 m² studio in Tonle Bassac for 80,000 USD (2,500 USD/m²). The unit is rented to an expatriate professional on a 12-month lease at 650 USD per month. Operational costs - property management, maintenance fee, and a 10% rental income tax - total approximately 150 USD per month.

Annual calculation:

• Gross income: 650 USD x 12 = 7,800 USD (gross yield: 9.75%)
• Operational costs: 150 USD x 12 = 1,800 USD
• Net income: 6,000 USD (net yield: 7.5%)

This level of return is difficult to replicate in more liquid but lower-yielding markets such as Bangkok or Singapore.

Scenario 2: Short-term rental

The same unit listed on short-term rental platforms at 45-55 USD per night with a realistic occupancy rate of 65% generates gross annual revenue of approximately 11,700 USD. However, management fees (operators charge 20-25%) and cleaning costs compress the margin significantly. Net return lands at 6,500-7,500 USD. This approach requires more active oversight and delivers only marginally higher net returns, though it provides greater flexibility for owner use.

Scenario 3: Off-plan capital appreciation

Purchase of an off-plan unit in Toul Kork at 1,600 USD/m² with a payment schedule of 30/30/40 (30% on signing, 30% during construction, 40% on handover). Target exit: resale upon completion at a 15-25% premium. Key risk: Cambodia has no statutory escrow-equivalent protection mechanism for off-plan buyers. If the developer fails to deliver, recovering funds is exceptionally difficult. Only developers with a verified track record of completed projects should be considered for this strategy.

Comparison table

Parameter	BKK1	Tonle Bassac	Toul Kork	Chroy Changvar
Price per m² (USD)	3,000-3,500	2,200-2,800	1,600-2,100	1,400-1,800
Gross rental yield	5-6%	6-8%	7-9%	5-7%
Typical tenant profile	Expat, diplomat	Expat, professional	Middle class, NGO staff	Chinese business
Resale liquidity	High	Medium-high	Medium	Low
Maintenance fee (USD/m²/month)	3-5	2-4	1.5-3	1.5-3
Oversupply risk	Low	Moderate	Moderate	High

Risks and mistakes

1. No buyer deposit protection during construction. Cambodia does not operate a statutory escrow or buyer-protection scheme for off-plan purchases. Funds are paid directly to the developer. In cases of insolvency, recovery is practically impossible. The only mitigation is rigorous due diligence on the developer's financial standing and completed project history.

2. Oversupply in the premium segment. Between 2019 and 2023, the number of new condominium units in Phnom Penh increased by over 300% (CBRE Cambodia). A significant proportion of that stock remains vacant, particularly in projects marketed primarily to Chinese buyers, a segment whose demand declined sharply after the pandemic.

3. Secondary market liquidity. Selling a condominium in Phnom Penh takes an average of 6-12 months. In Bangkok, comparable properties sell in 3-6 months; in major European capitals, in 2-4 months. Investors should plan for a minimum holding horizon of 5-7 years.

4. Construction quality. Building standards in Cambodia are generally lower than those in Thailand. An independent technical inspection (pre-purchase due diligence) is a necessity, not an optional extra.

5. Tax obligations in your home country. Most countries tax residents on worldwide income, including rental income earned abroad. Cambodia has no double taxation treaty with most Western nations, which can result in double taxation exposure. Local tax on rental income in Cambodia is 10%, and this may not be creditable against your home country tax liability. Consult a tax adviser familiar with cross-border real estate income before purchasing.

6. Sihanoukville - a market to avoid. The coastal city experienced a dramatic boom-and-bust cycle driven by Chinese casino investment. In 2026, the Sihanoukville property market remains highly illiquid, with numerous unfinished projects. This market is not suitable for investors prioritising capital preservation or stable yield.

7. Nominee structures and land ownership. Purchasing land through a Cambodian nominee company is illegal under Cambodian law. Enforcement is sporadic, but the risk of asset forfeiture is real and should not be underestimated. Foreigners seeking freehold security should restrict purchases to condominium units from the first floor upward, which is the only route to legally valid hard title.

FAQ

Can a foreign national legally purchase property in Phnom Penh?

Yes. Under Cambodia's Foreign Ownership Law of 2010, foreigners may acquire full freehold ownership (hard title / strata title) in a condominium building, provided the unit is located on the first floor or above. Ground-floor units and land are reserved exclusively for Cambodian nationals.

What is the entry price for a condominium in Phnom Penh in 2026?

In peripheral districts such as Chroy Changvar, studios of 25-30 m² start from around 35,000-45,000 USD. In central locations (BKK1, Tonle Bassac), entry-level studios begin at 60,000-65,000 USD.

What are the transaction costs when buying property in Cambodia?

The transfer tax is 4% of the property value, paid by the buyer. Additional costs include notarial fees (approximately 500-1,000 USD) and, where applicable, an agent commission of 2-3%, typically charged to the seller - though market practices vary.

Do I need to declare Cambodian rental income in my home country?

In most cases, yes. Tax residents are generally required to declare worldwide income, including foreign rental income. Cambodia has not signed double taxation treaties with most Western countries, which can complicate the tax position. Professional tax advice is strongly recommended before completing a purchase.

How do I conduct due diligence on a Cambodian developer?

Verify the developer's track record by inspecting completed and delivered projects. Confirm that a valid construction permit has been issued by the Ministry of Land Management, Urban Planning and Construction. Request an independent audit of the development company. Avoid developers without a demonstrable history of completed buildings. Engaging a Phnom Penh-based law firm specialising in real estate transactions is strongly advisable.

Is it better to buy a completed unit or off-plan?

A completed unit eliminates construction risk and allows rental income to begin immediately. Off-plan pricing is typically 10-20% lower, but without buyer deposit protection, it carries meaningful financial risk. Investors prioritising security should favour completed freehold units.

What maintenance fees should I budget for in Phnom Penh condominiums?

Maintenance fees range from 1.50 to 5.00 USD per m² per month, depending on the building's specification and location. Premium buildings in BKK1 sit at the upper end of this range.

Is Sihanoukville a viable investment location in 2026?

No, not for investors seeking stable returns or adequate liquidity. The market continues to be impacted by severe oversupply and the withdrawal of Chinese capital. Most analysts and practitioners advise against entry in 2026.

What about Siem Reap as an alternative to Phnom Penh?

Siem Reap, the gateway to Angkor Wat, has tourism-driven demand but an extremely limited condominium market. Hotels and villas dominate. For investors targeting condominium-format assets with sufficient market depth, Phnom Penh is the only viable option in Cambodia.

In what currency are property transactions conducted in Cambodia?

Virtually all real estate transactions in Cambodia are denominated and settled in US dollars (USD). The Cambodian riel (KHR) is used primarily for small retail transactions. This full dollarisation is a structural advantage for international investors.

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