English 
ភាសាខ្មែរ 
Key Takeaways:
- The condo market in Cambodia is gradually recovering thanks in part to the partial recovery of the travel and tourism sector and sustained domestic economic activity
- Despite the glut of condos, the market has shown its strength owing to steps taken by developers and property owners to adjust to shifting demand
- International tourists to double to 4 million in 2023, as China’s easing of its zero-COVID strategy presents a significant opportunity for Cambodia
- Cambodia attracted foreign direct investment of $4.68 billion in 2022, a 7.5% increase from the previous year
“More flights are being opened, which is attracting not only international tourists but also foreign investors, and this will push the real estate sector to bounce back”
Cambodia’s condo market has been affected by a variety of factors, including the COVID-19 pandemic and reduced foreign investment in property development projects. However, recent developments indicate that the market may be on the verge of a turnaround, as international visitor arrivals are expected to double in 2023, and the country’s tourism-related construction activity is improving.
Impact of international tourist arrivals
Cambodia’s international tourist arrivals have been steadily recovering since the pandemic’s onset, reaching 2.28 million in 2022, according to a figure from Tourism Ministry. The ministry has forecasted that this number is set to hit almost double to 4 million in 2023, as China’s easing of its zero-COVID strategy presents a significant opportunity for the country. The partial recovery of the travel and tourism sector has led to increased demand for affordable and mid-range condominiums, particularly as domestic tourists continue to support occupancy rates through staycations. As the tourism sector and domestic economic activity continue to recover, the occupancy rate is expected to improve further.
Impact of foreign investment
Cambodia attracted foreign direct investment of $4.68 billion in 2022, a 7.5% increase from the previous year. Major foreign investors in the country last year were from China, Japan, the Cayman Islands, Thailand, and Singapore, with investment projects focused on agriculture and agro-industry sectors, manufacturing, tourism, and infrastructure. Despite reduced foreign investor appetite for investing in property development projects, increasing foreign investment in other sectors is expected to positively impact the condo market, particularly as improved infrastructure attracts more international visitors.
Impact on condo supply
The condo supply in Cambodia reached 41,000 units in 2022, with three types: affordable, mid-range, and high-end. The sale price of these units saw a decrease of between 11% to 23% compared to 2019, prior to the pandemic. Similarly, the monthly rent of mid-range and high-end condos fell by 24% to 26%, according to CBRE Cambodia’s Fearless Forecast 2023. This reduction in prices and rents has been attributed to the excess supply of condos and reduced foreign investment in property development projects.
Insiders optimistic about international tourism and real estate growth
Experts in the tourism and real estate sectors are optimistic about a rebound in international tourism, which will boost economic activity. The tourism industry is expected to be the most lucrative sector, encompassing restaurants, hospitality, and guide services. The next sector to benefit from the tourism industry’s growth is likely to be the real estate market.
According to Oknha Sreat Mom Sophear, a board member of the Cambodia Tourism Association, more flights are being opened, which is attracting not only international tourists but also foreign investors. She stated, “This will push the real estate sector to grow.”
While China is a leading investor and tourist in Cambodia, analysts suggest that the Chinese are not at the top of the list of property buyers in Cambodia for living and investing. Instead, they are the largest suppliers of condos and commercial real estate. Speaking at Z1News’ weekly talk show, Khorn Kungkea, Chairman and CEO of ERA Cambodia, stated that Koreans, Japanese, Chinese, and Cambodians living overseas are the most significant foreign buyers of real estate, particularly condominiums. He sees the arrival of international tourists as a vital driver of the real estate market in Cambodia.
ERA Cambodia specializes in buying, selling, and renting condominiums, primarily in Phnom Penh, Sihanoukville, and Siem Reap. Currently, the company has approximately 1,500 agents who provide services for buying, selling, and renting condos in Cambodia. In more than four years of operating in the Cambodian market, ERA Cambodia has partnered to sell more than 30 large condominium projects, with a combined investment of billions of dollars.
In the past four years, ERA Cambodia has observed a significant number of young Cambodians buying condominiums in Phnom Penh through their agency. Many of these buyers are local youths aged 25 to 35, as well as Cambodian citizens living abroad. According to Khorn Kungkea, the future of condominiums lies in fulfilling the main needs of young Cambodians, and Phnom Penh is a strategic location for the supply of condominiums.
Khorn Kungkea emphasizes that condo development is a long-term investment project and an excellent housing option for both foreigners traveling or moving to the kingdom for employment and locals shifting to become middle-income earners. Furthermore, Cambodia is an emerging market with a high capital gain of 15% on average per year compared to other Southeast Asian real estate markets.
In light of the current situation, Mr. Kungkea encourages investors to work with professional real estate agents to make informed investment decisions. With lower prices and favorable conditions and promotions offered by developers, now is a great opportunity to buy condos.
