Cambodia Q1 2026: Economic Overview and Residential Market Pulse

The first quarter of 2026 looks like a period of resilience under pressure. Energy shocks, geopolitical tension, and a more unpredictable financial climate have made investors more defensive, not more adventurous. Predictability is scarce, and that alone is enough to keep decision-making conservative.

Even so, the dashboard does not read like a market in retreat. Growth is still expected to hold, with a World Bank forecast of roughly 4.3% for 2026. Inflation appears more contained than destabilizing, and the residential property price index looks soft rather than distressed. Interest-rate conditions still suggest caution in the banking system, but not paralysis.

That combination matters. Cambodia is not racing ahead on easy money. It is absorbing pressure while maintaining enough stability to keep property activity moving, especially where demand is grounded in actual use rather than speculation.

One of the clearer positives in the market is capital formation. The chart set shows FDI at about USD 5.1 billion in 2025, while QIP values rise much faster and point to a stronger pipeline of approved activity. The data also shows a 16% year-on-year increase in inflows, with China far ahead of the rest of the field at roughly USD 3.76 billion.

This is not portrayed as broad-based enthusiasm across every sector. It is more targeted than that, and the manufacturing story does a lot of the work. For real estate, that nuance matters: stronger capital inflows can help sentiment, employment, and industrial momentum without automatically reviving every property segment at the same speed.

Tourism remains a softer pillar than many investors hoped. 2025 international tourist arrivals came in at 5.6 million, down 15.7% year on year. That is a meaningful reminder that Cambodia is still exposed to weaker external travel patterns and tighter household budgets abroad.

Domestic tourism is doing more of the stabilizing work, helping keep activity levels from falling as sharply as international numbers alone might imply. For property, this means hospitality-linked confidence can improve, but likely in a measured, selective way rather than through a broad demand surge.

Condominium market activity is increasingly organised around what buyers can absorb. As of Q1 2026, Phnom Penh condo supply sits above 76,000 units across 150+ projects, with mid-range stock holding 61% of supply, affordable products at 26%, and high-end projects at 13%.

Developers are no longer designing primarily for the old buy-to-invest narrative. They are pushing more product into the buy-to-use segment, where local households and younger buyers are more open to vertical living than in earlier cycles. That is why mid-range still anchors the market, while affordable supply is growing into a much more meaningful share of future launches.

The upper end is not gone forever. High-end launches have started to reappear, but only as a secondary theme. The centre of gravity remains firmly in the practical segments where sales absorption still justifies completion.

If condominiums are becoming more acceptable, landed homes remain the instinctive first choice for many Cambodian buyers. As of Q1 2026, Phnom Penh’s landed property stock exceeds 181,000 units across 500+ projects, and the market is almost evenly split between affordable (49%) and mid-range (45%) product. High-end landed supply remains a niche player at just 6%.

The more important story is geographic. New launches and completions are increasingly clustering in the south, where lower land costs still allow developers to keep pricing within reach and where major infrastructure — especially the airport corridor and access roads — is creating a credible expansion path.

This corridor follows a familiar urban sequence: residential comes first, then commercial uses follow once population density and traffic flow are established. In other words, the southward shift is not just about cheaper land. It is about where developers and buyers still see future capital appreciation.

Among the three residential subsectors, serviced apartments look the healthiest in terms of supply-demand balance. The pipeline is measured rather than excessive, and that matters in a city where newer residential stock can quickly compete for the same tenants.

The near-term pipeline includes 300+ upcoming units across three projects in Q2 and Q3 2026, with 94% of that pipeline in Grade A. Branded operators and upcoming openings point to confidence, but not to oversupply. The distinction matters: momentum exists here precisely because the segment has remained disciplined.

That makes serviced apartments a useful contrast to older boom-cycle assumptions. Stability, measured additions, and a clear target tenant base now matter more than chasing aggressive expansion.

The final residential chart is arguably the most reassuring one in the set. Prices and rents are showing signs of stabilization. That does not mean every line is turning upward, and it does not mean all segments are equally strong. It means the market is moving away from sharp swings and back toward something more rational.

Affordable and mid-range condo launches have been pulling average condo selling prices lower, which is consistent with the market’s shift toward more attainable stock. In landed property, most product types have softened, but shophouses stand out as an exception because local demand still supports them. On the leasing side, average condo rents have edged up as newer product enters the market, while serviced apartment rents have slipped under the pressure of indirect competition from condominiums.

This is a healthier market signal than it may sound. Stabilization means developers and occupiers are beginning to operate inside a more believable price environment, and that is exactly the kind of base from which more durable recovery usually starts.