Thinking of investing in real estate in Phnom Penh? You're not alone!

Actually, many people find the bustling city of the Pearl of Asia fascinating and dream of owning, for example, a condo or a shophouse there.

Does it make sense from a financial perspective, though? Are property prices increasing in Phnom Penh? Is it expensive? Is it more profitable to invest in BKK1 or Russian Market? Is there any hidden tax? What yields can I expect?

We have all the answers you need.

How is the property market in Phnom Penh?

How is the property market performing? Let's rely on data and figures to find out.

Property types

In Phnom Penh, you can find various types of properties for sale, including apartments, condos, houses, and commercial spaces.

Apartments and condos are ideal for individuals or small families looking for convenient living, often offering amenities like security, parking, and gyms.

Houses provide more space and privacy, suitable for larger families or those desiring a standalone property.

Commercial spaces are available for business ventures, such as shops, offices, or restaurants, catering to entrepreneurs and investors looking to establish or expand their enterprises in the city.

Buy or rent?

(In case you want it for yourself, not for rental purposes)

If Phnom Penh is your city of choice, you may be pondering the buy vs. rent decision in this vibrant capital of Cambodia.

Obviously, it's better to buy if you're looking for an investment that will appreciate in value over time.

Our advice? Use the property price-to-rent ratio as your decision-making compass. This helps you understand the connection between rental income and the property's current price in terms of years.

According to Numbeo, the property price-to-rent ratio in Phnom Penh is around 16.13, which is below the world average.

In simple terms, it would typically require 16 years of rental payments, on average, to buy a property in Phnom Penh. If you plan to stay that much (or even less, since you can re-sell), it's better to buy.

Property prices in Phnom Penh

On average, according to the last data from Ministry of Economy and Finance (MEF), buying a property in Phnom Penh will cost you around $2,280 per square meter.

Naturally, things are quite spread out. An apartment in BKK1 may have a different price per square meter than a house in Toul Kork. We actually give you a more detailed breakdown in our pack for buying property in Phnom Penh and in Cambodia.

To put things in perspective, it is 8 times less than the prices in the center of New York.

Also, housing prices in Phnom Penh are 60% cheaper than in Bangkok.

The most expensive neighborhoods in Phnom Penh are probably BKK1 and Boeng Keng Kang, while the cheapest are likely to be those located in the outer suburbs.

Trends

First and foremost, we have to acknowledge that Cambodia is, as we speak, a very fragile country. The last Fragile State Index that has been reported for this place is 80.5.

This is important to remember when wondering if it's a good investment to buy a property in Phnom Penh.

That's not all - this impressive growth will keep going on since Cambodia's economy is expected to soar by 28.4% in the coming 5 years, resulting in an average GDP growth rate of 5.7%.

If you want to invest in real estate in Phnom Penh it's a good thing because individuals are becoming wealthier, leading to a probable rise in housing prices.

Also, in Cambodia, the average GDP per capita has changed by 7.4% over the last 5 years. It's a satisfactory number.

These are positive signals showing that property prices in Phnom Penh might increase in 2024 and during the coming years.

Looking for more updated data? We've done a big-picture study to find out if it's a good idea to purchase property in Cambodia right now.

Buying property in Phnom Penh

Buying real estate in Phnom Penh can be challenging due to the lack of reliable and up-to-date information available.

Buying process

In our pack, we've explained the entire process of buying properties in a detailed way. We've pointed out the mistakes to steer clear of, shared tips for finding properties that give you the best returns, and provided information about taxes and necessary documents.

Now, we're giving you a simplified version of the buying process.

This is the step-by-step process to purchase a property in Phnom Penh:

• Verify eligibility as a foreigner to buy property in Cambodia.

• Engage a licensed real estate agent or developer in Phnom Penh.

• Choose a property and negotiate the price.

• Sign a Letter of Intent and pay a reservation fee.

• Conduct due diligence, including the "Hard Title" search at the Land Office.

• Sign the Sale and Purchase Agreement with the seller.

• Pay the initial deposit, usually 10% of the property price.

• Obtain a "No Objection Certificate" (NOC) from the local Sangkat (commune).

• Transfer funds to a local bank account for the property purchase.

• Complete the property transfer and pay the remaining balance.

• Register the property at the Cadastral Office and obtain a new "Hard Title" certificate.

• Update property ownership records at the local Sangkat and Tax Office.

Make a profitable investment in Phnom PenhBetter information leads to better decisions. Save time and money.

What you can get

As mentioned before, the average price per sqm in Phnom Penh is $2,280. The cost of a one-bedroom property (60 sqm) is approximately $137,000, and a two-bedroom (85 sqm) would be around $194,000.

Obviously, property prices will change based on both the property itself and its location.

Prices tend to be higher in the top areas of Phnom Penh. For instance, a house in Boeung Keng Kang might be priced at around $430,000, whereas a residence in Tonle Bassac could have a price of $510,000.

Still, some spots are easier on your budget. You might discover a condominium in Russey Keo for $80,000 or a condominium in Toul Kork that's priced at $60,000.

Find a more detailed price list in our full pack for buying property in Cambodia.

Common mistakes

Here are the main pitfalls when buying a property in Phnom Penh, Cambodia:

• Complex ownership laws: Confusing land tenure and foreign ownership regulations can lead to legal challenges.

• Economic instability: Cambodia's volatile economy may affect property values and investment returns.

• Land disputes: Lack of transparent land records can result in ownership conflicts and potential loss of property.

• Cambodian property scams: Beware of fraudulent deals, fake titles, and untrustworthy agents.

• Infrastructure issues: Some areas lack proper infrastructure, affecting property value and livability.

• Environmental concerns: Coastal areas may be vulnerable to climate change and flooding risks.

• Title irregularities: Ensure the property has a valid and clear title to avoid future disputes.

• Hidden costs: Be aware of extra fees and taxes when purchasing, which can significantly impact the overall cost.

We don't want this to happen to you, so we recommend you to use our free consultation service now. Avoid these mistakes and save a lot of money.