The Phnom Penh Property Market in 2026: Oversupply, Yields, and Where the Floor Is
Condo oversupply has reset prices and pushed gross yields up. We look at what the numbers actually support — and what they do not.
By Research Cambodia
Phnom Penh is the clearest case study in Cambodian property of a market that got ahead of its demand and is still working through the consequences. For a buyer in 2026, that is not automatically bad news — repriced markets are where durable yields are found — but only if you read the supply picture honestly.
We track Phnom Penh prices and yields each quarter in the Cambodia Price & Yield Index — see the latest 2026 Q1 briefing.
How we got here
Between roughly 2015 and 2020, Phnom Penh approved condominium supply far faster than the city could absorb it, much of it aimed at foreign — especially regional — investors. The pandemic then removed both the construction-driven rental demand and a large share of the speculative buyer base at the same time. The result was a multi-year overhang of completed and near-complete units competing for a thinner pool of tenants.
Oversupply does not destroy a market. It transfers pricing power from sellers to buyers and from developers to tenants. The question is always: at what price does the asset make sense as a rental, ignoring resale entirely?
What the yield picture looks like
With prices soft and rents holding better than capital values, gross yields on well-located Phnom Penh condos have widened relative to the boom years. On paper, advertised gross yields in the mid-to-upper single digits are common.
The honest version has three deductions the brochures skip:
- Vacancy. In an oversupplied submarket, budget for real vacancy, not the optimistic “1 month a year.” Some segments run materially higher.
- Service charges & sinking fund. Condo management fees in Phnom Penh are not trivial and vary widely in quality.
- Management & turnover costs. Remote, foreign landlords pay for management, and tenant turnover in this market is frequent.
Net yields after honest deductions are meaningfully lower than the headline. That is not a reason to walk away — it is the actual number you should underwrite to.
Where the floor is — and isn’t
Two things tend to be true at once in a repriced market:
- Generic, mid-tier supply in saturated districts has limited pricing support. There is simply a lot of it, and more can be built.
- Genuinely scarce assets — well-managed buildings in established central locations, with real owner-occupier and expat-tenant demand — have held value far better and are where the defensible floor sits.
The mistake is treating “Phnom Penh condos” as one asset. The spread between the best and worst submarkets is the whole story.
What we would underwrite to in 2026
- Buy for net yield you can defend, not capital-growth projections.
- Prefer proven, well-managed buildings over the cheapest new launch.
- Stress-test for higher vacancy than the agent quotes.
- Treat any capital appreciation as upside, not the thesis.
Phnom Penh in 2026 rewards the patient income buyer and punishes the buyer chasing the next boom. The numbers support the former; they do not yet support the latter.
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