Both government officials and experts said that among the pillars of Cambodia’s economy, trade, tourism and agriculture are all growing this year, but the real estate sector remains uncertain next year.
Analysts say that both international organizations and real estate stakeholders seem hesitant to predict the future of the sector in 2025. A recent World Bank report said that real estate investment and the state of the sector remain low.
The report said that the decline in the real estate sector continued to reflect the overcapacity in the real estate market and the ongoing correction in the housing market.
According to a local media report published in late November, in the first 11 months of 2024, there were 2,633 construction investment projects across the country. It has a total construction area of over 10 million square meters and an estimated investment value of approximately $4.33 billion.
Number of investment projects, investment capital and construction area approved for 2024 This is a decrease of approximately 15.17 percent compared to 2023. There are 2,924 investment projects in 2023, with a construction area of more than 12 million square meters and an investment capital of approximately $5.1 billion.
Although the real estate market in Cambodia is still quiet in 2024, Cambodian economists expect that if trade grows well, tourism increases, and more investors come, whether they want it or not, it will help push the real estate sector back to growth, even if not by much.
Economists have argued that The real estate sector is also related to the movement of people. So if foreign tourists come to invest and trade flows well, the flow of economic activity will move and wherever it is blocked, it will also help push the blockage to move again.
Overall, for the year 2025, the real estate sector may see a return to growth because the growth of key sectors of the economic flow will help push this sector forward. However, the growth momentum is not high as long as it does not explode on its own.
Therefore, analysts believe that the construction and real estate sectors will not play a significant role in the country’s economic growth. Instead, its future recovery depends on economic growth and growth in key sectors that are key drivers of economic growth for 2025.
Deputy Prime Minister and Minister of Economy and Finance Aun Pornmonirath said recently that the economy is forecast to grow by about 6.3 percent in 2024, up from 5 percent in 2023, driven by a rebound in the garment sector, an increase in non-garment manufacturing, and a gradual recovery in the garment and tourism industries.
When defending the recent 2025 national budget law, he said that Cambodia’s economy will continue to move forward. He said that for 2025, this growth will push Cambodia’s gross domestic product (GDP) to $51.39 billion, and per capita GDP is estimated to reach $2,924.
He said that the industrial sector, mainly the garment industry, is projected to grow by 8.6 percent. The service sector, mainly tourism, transportation, telecommunications, and trade, is expected to grow by 5.6 percent. The agricultural sector is forecast to grow by 1.1 percent. He added that the country’s inflation is forecast to remain at 2.5 percent in 2025 due to the domestic economic momentum and the normalization of international trade and commodity prices.
Separately, World Bank economists have also recently highlighted the good state of the economy. Cambodia’s largest lender in 2024 said Cambodia’s economic growth will reach 5.3 percent in 2024, up from 5 percent in 2023, driven largely by trade, tourism and foreign direct investment, but real estate is not doing well.
