Cambodia’s economy is projected by the Asian Development Bank and the Ministry of Economy and Finance (MEF) to grow at approximately 5.0% in 2026, with GDP reaching an estimated USD 53–54 billion and per-capita GDP crossing roughly USD 3,000. Growth continues to be underpinned by garments, travel goods and footwear exports, tourism recovery, and a broadening industrial base, with construction and real estate remaining a meaningful, if more moderate, contributor to output and employment than during the 2018–2019 boom years.

Fixed-asset investment approvals through the Council for the Development of Cambodia (CDC) point to renewed investor confidence at the macro level even as real estate itself remains in a correction phase. Cambodia attracted approximately USD 7.8 billion in fixed-asset investment across January–September 2025, a year-on-year increase of roughly 47%, and the government approved 630 investment projects worth close to USD 10 billion for full-year 2025 — an increase of 216 projects and about USD 3 billion over 2024. These approvals span 21 provinces and are projected to generate approximately 438,000 jobs, reflecting a deliberate policy push to diversify investment beyond Phnom Penh and Sihanoukville into secondary provinces and industrial corridors.

The construction industry itself is forecast to grow by approximately 6.6% in real terms in 2026, accelerating to an average of around 8.2% per year between 2027 and 2030, driven by transport, renewable energy, industrial, and water infrastructure investment. Real estate proper is on a more cautious trajectory: most market analysts (Bamboo Routes, ERA Cambodia, CVEA, Global Property Guide, and the Royal Academy of Cambodia) characterise 2026 as a “reset year” rather than either a retreat or a boom, with national residential prices expected to move in a narrow band of roughly –3% to +2% over the next twelve months, while well-located prime Phnom Penh condominiums are expected to modestly outperform weaker investor-oriented stock.

1. Comparative Snapshot: Cambodia vs. Regional Peers

Factor	Cambodia	Vietnam	Thailand
Currency risk	None – fully dollarised, USD pricing	VND exposure; hedging often required	THB exposure; hedging often required
Foreign condo ownership	Strata title, up to 70% of building, freehold-equivalent	Leasehold, 50-year term, renewal uncertainty	Condo quota capped at 49% foreign ownership
Foreign land ownership	Prohibited directly; Trust Law / long lease workaround	Prohibited; long-term lease only	Prohibited; long-term lease only
Typical prime gross yield	6.5% – 9% (Phnom Penh)	~3% (Ho Chi Minh City)	~6% (Bangkok)
Entry price, quality condo	From ~US$75,000–100,000	From ~US$100,000+	From ~US$150,000+
Investment law incentive	Up to 100% foreign ownership; multi-year tax holidays	Sector-specific incentives; higher minimum thresholds	BOI incentives; strong but selective
Secondary-market liquidity	Thin; 6–18 months average sale time (Phnom Penh)	Moderate	Deep – most mature ASEAN market

 

2. Regulatory and Policy Landscape

Regulatory developments over 2025–2026 materially affect the near-term investment calculus and require active monitoring by tax and legal advisors.

• Capital Gains Tax (Prakas No. 496, MEF, 18 July 2025): a flat 20% CGT applies to gains from resident and non-resident taxpayers. CGT on leases, investment assets, goodwill, intellectual property and foreign currency transactions took effect from 1 September 2025 / 1 January 2026. CGT on immovable property (land, buildings, and constructions) has been deferred a second time and is now scheduled to take effect on 1 January 2027, giving developers and investors a further transition window.
• Share transfer CGT: gains on the transfer of shares in Cambodian companies remain subject to CGT from 1 January 2026 under separate implementing provisions, with the target company responsible for withholding and remitting tax — a point of particular relevance to joint-venture and SPV-based real estate structures.
• Exemptions: primary residential property, agricultural land in active production, intra-family transfers by inheritance or first donation, and state or public-benefit property are excluded from CGT, softening the impact on owner-occupiers and smallholders.
• Transfer tax relief: the stamp duty exemption on first-home purchases up to approximately USD 210,000 has been extended through end-2026, continuing to support entry-level and mid-market residential demand.
• Trust Law (2018) and Investment Law (2021): together these instruments continue to be the primary legal channels through which foreign capital gains effective control of land-based projects and qualifies for tax-holiday or accelerated-depreciation incentives.

The net effect of the CGT deferral is to preserve, for at least one more transaction cycle, one of Cambodia’s relative advantages over jurisdictions where capital gains on property are already taxed and enforced; investors and developers should nonetheless build 2027 CGT liability into underwriting for assets they intend to hold through the transition.

3. Sub-Sector Outlook, 2026–2031

Sub-sector	2026–2031 outlook	Comparative advantage driver
Industrial & logistics	Strongest performer; over 1,900 ha of new industrial land launched in 2025; furniture and light-manufacturing exports near US$1bn	SEZ network, competitive land and labour cost, proximity to Vietnam/Thailand supply chains
Residential – prime Phnom Penh	Cautiously positive; flat to +4% for well-located condos over 12 months, wider 3–5-year recovery	Dollarised yield premium, strata ownership, diaspora and expat demand
Residential – mass-market / borey	Stable, supported by first-home stamp duty exemption to end-2026	Domestic mortgage growth, urbanisation, first-time buyer incentives
Residential – Sihanoukville / secondary coastal	Weak; among the highest vacancy rates in the region	Requires deep local knowledge; oversupply overhang from 2018–2019 cycle
Commercial / office	Selective; prime BKK1 and Tonle Bassac rental yields of 6.5–8%	Institutional tenant demand from financial and professional services
Construction materials & contracting	Growth of ~6.6% in 2026 rising to ~8.2% p.a. 2027–2030	Infrastructure mega-projects (airport, expressways, transport master plan)

 

4. Key Growth Drivers

• Transport and logistics infrastructure: the Techo International Airport, the Phnom Penh–Bavet Expressway, and the planned Phnom Penh–Siem Reap–Poipet Expressway (construction expected to commence 2026) are opening previously peripheral land corridors to development and materially reducing intercity travel times.
• Industrial land absorption: sustained expansion of Special Economic Zones and industrial parks, with furniture, electronics-adjacent, and light-manufacturing tenants continuing to diversify away from garments alone.
• Urbanisation and demographic tailwinds: continued rural-to-urban migration and a young population underpin structural, if moderate, mass-market housing demand over the five-year horizon.
• Investment approvals momentum: a 73% year-on-year rise in approved investment projects for the first nine months of 2025 (546 vs. 315 projects) signals broadening investor confidence beyond real estate alone, with knock-on demand for industrial and logistics space.
• Policy continuity: political stability following the leadership transition to Prime Minister Hun Manet is widely cited by regional advisory firms as supportive of continued, gradual institutional and governance reform.

5. Conclusion

Cambodia’s comparative advantage in real estate and construction over the next five years is real. Investors and developers who align capital with Cambodia’s genuine structural strengths — industrial and logistics real estate, infrastructure-linked construction, and well-located, income-producing residential assets — are best positioned to capture the sector’s comparative advantage through 2031, while those pursuing undifferentiated speculative exposure face a materially less favourable risk-return profile than in the previous cycle. For better decision investor shall engage compliance and tax advisory support early to navigate QIP qualification.

Cam Accounting & Tax Service Co., Ltd., a member firm of Kreston Global, holding a GDT tax agent license, Accounting, Auditing, and liquidator licenses from ACAR, and accredited by the National Bank of Cambodia (NBC) and Trust Regulator (TR).

For more information, please contact our Accounting, Tax and Audit Expert

Ms. Haing Sivtieng, MIPA, MBA
Partner
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