Cambodia, a small nation of just under 16 million people, probably isn’t the first place you’d consider buying property in.

In fact, thoughts of genocide and the Khmer Rouge might enter your mind first when “Cambodia” is mentioned. That’s almost certainly the case if you aren’t familiar with the nation or its recent history of growth.

While this country in the heart of Southeast Asia certainly had its problems, more than two decades have passed since the Khmer Rouge era. Cambodia is now open for business, developing rapidly, and has one of Asia’s best property markets.

Today, we’ll go over several metrics including rental yields, comparative analysis with other Asian markets, along with wider economic fundamentals. Hopefully you’ll understand why we’re bullish on Cambodia real estate by the end of this article.


Southeast Asia’s Strongest Economy

A good property market demands a robust economy. For its part, Cambodia’s economy is among the best in the whole region.

Cambodia is growing at a rapid yet sustainable pace. Their GDP rose by 6.9% last year, ranked as the second fastest growing in Southeast Asia behind an otherwise noncompetitive Laos.

Not only that, but Cambodia has a long history of high growth which hasn’t slowed down in decades. They skipped the Asian Financial Crisis of the 1990s, missed the tech bubble of the early 2000s, and outgrew the 2008 Global Recession.

Cambodia managed all this while growing beyond 7% per year on average too.


Like other frontier markets, Cambodia has largely proven itself immune to global economic turmoil.


There obviously isn’t such thing as a “recession-proof economy”. Every country has problems, while every investment has its risks.

With that said, Cambodia’s economy is about as close as one gets. Lack of dependence on markets such as the United States and European Union, in addition to strong fundamentals, has worked in Cambodia’s favor.

Low Property Values, Great Potential

There’s few capital cities in the world where you can purchase prime property for low prices – especially in high-growth Asian markets.

Central real estate in Bangkok, Thailand is now worth over US$4,000 per square meter on average. “Buying” a leasehold apartment in less-developed Hanoi, Vietnam will even set you back more than US$3,000 per square meter.

However, Phnom Penh stands out as the only Asian capital (besides Tbilisi, Georgia) where you can buy real estate in the middle of the city for under US$1,000 per square meter.

We aren’t talking about Cambodia’s newly-built condominiums which have started popping up over the past few years though. These buildings are a testament to the country’s fast development, but are way too expensive with prices approaching Bangkok’s levels.

Instead, look toward Phnom Penh’s older shophouse flats. These colonial apartments might not have a pool or a gym, but they’re also about 1/4th the price of a new condo unit, were solidly-built by the French, and are generally in good shape overall.


Shophouse apartments in Cambodia have attractive valuations – even if some renovation work is often needed.


High Rental Yields in Phnom Penh

A few property markets in Southeast Asia have great capital appreciation prospects, yet suffer from horrible rental yields.

For example, real estate in Singapore is fairly valued compared to its peers. Prices are around half of those in competing financial hub Hong Kong’s. But rental yields are abysmal, hovering around the 2% range.

Similarly, Kuala Lumpur’s property market is among Asia’s least expensive. That’s despite being the capital of Malaysia, one of the more developed nations in the region. Rental yields barely break 3% on average though.

Phnom Penh is fortunate enough to have both high rental yields and strong appreciation prospects. The type of shophouse apartments mentioned further above, on top of attractive valuations, also boast yields exceeding 7% on average.

The current situation won’t last forever though. Chinese and other foreign investors, now in a “wait and see” mode until the 2018 elections, are looking to double down on their Cambodian assets later next year.

Greater foreign investment might not immediately lead toward higher prices, but the overall trend is clear. Cambodia’s population is rising quickly, its economy is rising even faster, all while tourists and businesses alike catch word of Cambodia’s potential.

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About Reid Kirchenbauer

Reid Kirchenbauer is the Founder of InvestAsian. He's an accomplished stock trader and property investor in Thailand, Cambodia, and many other places. He's been featured in publications such as Forbes, Nomad Capitalist, Property Report, and Seeking Alpha. Download his free investment guide by clicking here.

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