Phnom Penh Condo Boom Meets Market Reality

Kiripost

Phnom Penh’s skyline is filling fast. More than 75,000 condominium units have already been completed, with another 10,000 under construction, according to APS Cambodia. Yet developers are struggling to sell, as prices and expectations fail to match what buyers actually want.

The market has shifted sharply towards affordable and mid-range projects. In 2025 alone, ten new developments were launched, eight of them in the budget segment. Together they added around 7,000 units, most priced between $37,000 and $77,000. Analysts say this reflects real demand, with younger Cambodians and foreign investors favouring lower entry costs and flexible payment terms.

A notable trend is the move from “buy-to-lease” speculation to “buy-to-use” ownership. More buyers now purchase condos to live in, rather than to rent out. Economists argue this is healthier for the market, reducing bubble risks and building more stable communities.

Generation Z and millennials are driving the change. For many young professionals, convenience and lifestyle matter more than space. Condos near workplaces, universities and amenities are increasingly attractive, even if monthly rents are higher than traditional borey housing on the city’s outskirts.

Still, challenges remain. Projects launched at peak prices before the pandemic are struggling, particularly those in weak locations far from the centre. Buyers expect proximity to schools, offices and lifestyle facilities; without these fundamentals, sales are slow.

Rental demand is rising among office workers and students migrating from the provinces, drawn by security and city access. Yet the average condo size—around 35 square metres—remains modest compared to landed housing, which offers more space but often at the cost of longer commutes.

Condo activity peaked in 2015 and 2019, before slumping during the pandemic and China’s property crisis. A recovery began in 2025, led almost entirely by affordable projects. Economists believe the market will consolidate within five years, with demand stabilising in the affordable and mid-range brackets.

For now, Phnom Penh’s condo boom reflects rapid urbanisation and a rising middle class. But developers must adapt to shifting demand and tighter budgets. Without realistic pricing and strong locations, the city’s high-rise ambitions risk outpacing what buyers are willing—or able—to pay.

-2026-03-04