A key trend set to drive Cambodia’s residential property sector in coming years is a large increase in domestic demand for affordable housing, especially in urban centers such as Phnom Penh, said a new report by Knight Frank, the London-headquartered global real estate consultancy.
Alongside this outlook, the firm said that foreign investment into the Cambodian real estate market continued to be a key factor behind overall growth as of 2024, a trend also visible in neighboring cities such as Bangkok, Thailand.
The Knight Frank report, titled ‘APAC Outlook: Unlocking Investment Potential: Emerging Markets in Asia-Pacific’, explores the dynamics of the notable real estate markets across the Asia-Pacific (APAC) region, including trends in the Philippines, India, Malaysia, Thailand and Cambodia.
According to the analysis, while only 24.2 percent of Cambodia’s population currently resides in urban areas, this share is projected to increase to 30.6 percent by 2030, and a further escalation to 41.1 percent by 2050.
According to Knight Frank, this swift increase in urbanization presents a growing need for the development of affordable housing, especially in Phnom Penh.
As young rural populations from across Cambodia migrate to urban centers for better opportunities, increasing disposable incomes and reduced borrowing costs, they will simultaneously drive domestic housing demand, the report explained.
The report highlighted that while foreign interest and investments continue to shape the landscapes of markets in the APAC region, such as Cambodia, understanding local dynamics still remains essential for investors looking to capitalize on emerging opportunities in the region.
Hence, increasing rates of urbanization being witnessed in Cambodia, and especially Phnom Penh, provides a positive outlook for investors looking for long-term gains on residential property investments, given the rising potential of domestic demand for inner-city housing, whether in terms of rental returns or eventual asset resale rates.
Ross Wheble, Country Head of Knight Frank Cambodia, said that foreign investment continues to be a key driver for the Cambodian property sector.
“Investment has been pouring in from key countries such as Japan, Singapore, Korea, Malaysia, Chinese mainland, Taiwan, and Hong Kong SAR,” he said, adding that “reflecting strong international interest in our market.”
Meanwhile, developers are increasingly diversifying their product offerings to stand out from the crowd, he said.
“Developers are increasingly integrating wellness-oriented features into their projects; however, these additions are more often used as unique selling points rather than being driven by explicit buyer demand,” Wheble explained.
Detailing more on Phnom Penh demand trends this year, the Knight Frank report highlighted that in desirable downtown areas like Boeung Keng Kang 1 (BKK1), strong demand for rental properties is attracting both local and foreign investments.
Source: Knight Frank
