Cambodia Rental Rates Over Time – A 10 Year Study

• Over the last 3-4 years, rental prices have remained relatively flat due to the increase in the supply of condominiums and apartment buildings in central Phnom Penh
• One of the key factors for surge in rental rates is the boom in the Property Market. Rental rates over time had doubled and tripled within a ten-year timeframe.
• Seasonality factor is vital in the price trend. Rentals surge around July to mid-August, and then slow down by September to November every year.
• When there is an increase in foreigner visits, rental prices also go up and when there is an oversupply of available spaces, landlords lower down rental prices to get higher occupancy rate.

Cambodia’s economy is steadily rising in the past 20 years. It has experienced an average of 7% GDP in the last 10 years, as reported by both ADB and World Bank. Foreign Investment is also on the rise. One of the key factors for this growth is the boom in the Property Market. Rental rates over time had doubled and tripled within this time frame. 

There are many reasons for the surge in rental rates, and the percentage of increase varies on location. We’ve seen an increase of almost 100% in the last 10 years. One huge factor is the influx of foreigners in the country due to increased Foreign Direct Investment, and the subsequent demand for temporary living spaces that followed. Let’s take a look at how far Cambodia had become.

Types of Rental Properties in Cambodia

Like any country, Cambodia has many properties available to fit the client’s preference. The most common types of rental properties in the Kingdom are apartments, condominiums, Villas, and Townhouses. Each one has a specific use and ideal for a different set of clientele.

Apartments

Apartments for rent are preferred by foreign workers living in Cambodia alone. This type of accommodation is available in almost all parts of the country. They are usually offered fully furnished with everything that a resident will need. It’s a convenient and practical housing choice.

City center apartments are more expensive than those located on the outskirts of the city. They also feature modern amenities that pass western standards. In the Phnom Penh city center, the current rental rate range from $500 to as much as $1500. Prices depend on the number of bedrooms, amenities, and quality of the furnishings. Apartments for rent on the outskirts of the city and in provinces range from $150 – $1,000.

Serviced Apartment

Serviced Apartment is a type of accommodation that offers residents the convenience of not having to worry about regular household tasks like cleaning the house, taking out garbage, and doing the laundry. Most of the time, it also includes 24 hours security, internet and cable TV connection, and reception or concierge services. These apartments also have additional amenities like swimming pool, generators, and elevator.

Flats and Shophouses

Flats and Shophouses are a very common type of housing space in Cambodia. They existed even before apartments are built. This is a type of mixed-use housing. The upper floors are used as living space while the ground floor serves as a retail or commercial space. 

Shophouses, in particular, are usually found along main roads where foot traffic is high. They are converted to bars, restaurants, coffee shops, and “variety” stores. The owner oftentimes lives on the upper floor. Flats are older apartment type accommodations located in the inner-city areas, usually accessible via small alleys along major roads.

Flats for rent are cheaper than regular apartments because they don’t have amenities like building security, elevator, or generator. Shophouse rental rates are a bit higher than apartments because the ground floor can be used or rented as commercial space.

Current rental rates for flats range from $300 – $700, while shophouses are rented for $700 – $2,500 in the city center. Prices, like any housing space, vary according to the number of bedrooms, amenities, and furnishings.

Condominium

Condos first rose in Cambodia in 2008. Rose Garden is the first condominium building to be built in Phnom Penh. However, strata title – a type of property ownership available to foreigners, was only introduced in the later part of 2011. In Siem Reap, the first condo was completed early part of 2019 while Sihanoukville’s first condo was built in 2015.

Condo units are a type of housing space that provides additional amenities like a swimming pool, gym, reception and lounge services, full security, generator, elevator, and the likes. It’s a high-end version of an apartment. This type of housing caters to individuals who like living in comfort and style. Most of them are located in suburban areas, near the business districts. It allows residents the convenience of living near their place of work.

Rentals for this type of housing space are currently priced at $750 and above, depending on the number of rooms, furnishings, and location.

Villas and Townhouses

Elegant Villas in Cambodia are previously country homes of the elite and upper classes. Majority of these villas have large stone pillars and winding staircase, designed to showcase wealth and power. Nowadays, these villas for rent are used as homes of large expat families or converted into commercial villas. Foreign organizations and government offices use commercial villas as headquarters/base of operations. Sometimes, it is also converted into hostels or lodging/guesthouses.

There are many villas in the town centers, but mostly they are located on the outskirts of the city. Villas have large spaces, and big outdoor gardens, parking space, and often with swimming pool as well. They retain the old-world charm of the New Khmer Architecture but furnished with modern appliances and furnishings.

Townhouses, unlike Villas, are usually located in suburban areas. It also has large spaces and plenty of rooms, but it has the convenience of being near the business districts. Both Villas and Townhouses are more expensive than regular apartments and condo units because it occupies a larger land area.

Currently, the average rental price for a 3 bedroom Villa is around $2,000 and above in the city center. On the outskirts of the city, the price of villas and townhouses is slightly lower.

Shared Accommodations

Shared accommodations are perfect for foreigners with a lower housing budget who needs temporary accommodations. They include interns and students, or travelers that stay longer in Cambodia. They are fully furnished and oftentimes, residents just need to bring their luggage. Everything else they need is already provided in the apartment.

In a shared accommodation setting, residents only pay for his own room in a big house. Common spaces like the kitchen and living areas are shared, the same way with utilities. Shared apartments can range from $50 – $300, depending on location.

Commercial and Retail Spaces

Commercial and Retail Spaces started out as shophouses in Cambodia. This type of structure is a mixed residential and commercial space wherein the street-level space is used as a storefront and the upper floor is used as a residential space. It is still the most common type of commercial space available in the city centers.

However, commercial and retail spaces started when City Mall, Sorya, and eventually AEON Mall was opened. The retail space explosion happened in the last 5 years, immediately after the success of AEON Mall 1. Now there are other bigger commercial spaces like AEON Mall 2, Exchange Square, Olympic Mall, TK Avenue, and many others. Per sq.m. rentals for these spaces range from $14 and above.

Factors Affecting Rental Rates

Percentage of Growth		10%	25%	45%
Housing Spaces For Rent City Center	Current	Last Year	5 Years	10 Years
Studio Apartment	$500	$450	$300	$160
Single Unit Apartment 1 Bedroom	$800	$700	$500	$250
Single Unit Apartment 3 Bedroom	$1,500	$1,300	$950	$500
Villa for Rent 3 Bedrooms	$2,000	$1,800	$1,300	$700
Serviced Apartment 1 Bedroom	$1,200	$1,000
Serviced Apartment 3 Bedroom	$2,500	$2,300

Percentage of Growth		10%	25%	45%
Housing Spaces For Rent Outside the City	Current	Last Year	5 Years	10 Years
Studio Apartment	$150	$130	$100	$50
Single Unit Apartment 1 Bedroom	$300	$270	$200	$100
Single Unit Apartment 3 Bedroom	$800	$700	$500	$250
Villa for Rent 3 Bedrooms	$800	$700	$500	$250
Serviced Apartment 1 Bedroom	$800	$700
Serviced Apartment 3 Bedroom	$1,700	$1,500

There are many reasons for the surge in rental rates over time. There is the seasonality factor wherein rentals surge around July to mid-August, and then slow down by September to November every year. During the lean months, rental prices can easily be negotiated with landlords because of the need to get all units occupied.

The influx of foreign workers in Cambodia drives rental prices. Meaning, the upward and downward trend in foreign visitors is aligned with the occupancy of the available spaces. When there is an increase in foreigner visits, rental prices also go up because the demand is high. And when there is an oversupply of available spaces, landlords lower down rental prices in exchange for a higher occupancy rate.

Economic Surge of 2014 – 2016

A considerable surge was seen from 2014 – 2016 in rental prices. According to Phnom Penh Branch Manager, Malay Nop, factors in the influx of foreign workers in the increase in rental prices.

“With the lack of official information from the government and industry bodies, it’s hard to peg down the exact reason for the sharp increase. However, the general consensus is that there is an increase in foreign workers needing temporary housing during this time.”

Stabilization of Rental Rate Growth from 2016 – 2019

From 2016 onwards, rental rates started stabilizing to approximately a 5-10% yearly increase. This is due to the increase of available residential and commercial spaces everywhere in the country, most especially in the urban areas. “Over the last 3-4 years, rental prices have remained relatively flat due to the increase in the supply of condominiums and apartment buildings in central Phnom Penh”

Location and Locale

The percentage of growth is dependent on the location of a specific property. In the last 5 years, the rental price of properties in the city center and commercial districts had doubled due to the high demand. Similarly, prices increased in areas that experienced road or infrastructure developments. Sihanouk Province is a very good example of this driving factor.

Direct Foreign Investment is also a driving factor in price changes. The huge Chinese investments that came into the country resulted in increased condominium and apartment building developments. This, in turn, led to oversupply and the succeeding decrease in rental prices.

Rental Rates Over Time 

For purposes of showing how the rental rates have changed over time, let’s look at actual properties handled by IPS in Phnom Penh from 2009 – 2019.

1 Bedroom Apartment For Rent

Villa For Rent

Townhouse For Rent

The Way Forward

Rental properties are a sure-fire way of getting passive income from your investment. Your money grows for you without exerting too much time and effort. You will benefit from the Yearly Rental Yield, which is the percentage of income you receive from rental. Additionally, you will also get the Annual Capital Growth, which is the actual increase in value of your real estate property. With real estate properties in Cambodia, there is much to gain and little to lose.

The rental rates in Cambodia is expected to stabilize in the coming years due to the additional housing projects currently underway. Supply is expected to increase, which may result in a possible occupancy rates. However, this doesn’t mean that you will not get a return of investment. The opportunity is still great. And if you’re wise, you’ll know that the time to invest is now.