Cambodia’s Construction & Real Estate Sectors Forecasted for Slow Recovery in 2025

• 15 February 2025
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Cambodia’s construction and real estate sectors are projected to experience modest growth in 2025, with forecasts indicating a rise of approximately 2.5% and 2.6%, respectively. These estimates come amid ongoing recovery efforts following the downturn triggered by the COVID-19 pandemic in 2020.

During the recent Public Forum on Macroeconomic Management and the 2025 National Budget Law, officials from the Ministry of Economy and Finance addressed the slower-than-expected recovery. They highlighted that subdued construction and real estate activities, coupled with limited inflows of foreign investment capital, are major contributing factors to the low growth rates.

“The construction sector is likely to continue lagging below its usual performance levels,” stated a ministry spokesperson. “We anticipate that the recovery of foreign investments, particularly in tourism and commercial construction, will remain sluggish. Meanwhile, residential construction is expected to show modest growth compared to levels seen before the pandemic.”

In the medium term, the construction sector is anticipated to be buoyed by residential projects driven by Cambodia’s burgeoning demographic dividend. Additionally, there is a growing trend toward new construction activities in the industrial and factory sectors, which may help stimulate overall sector performance in the short to medium term.

The real estate market is also expected to grow at a slower pace than in previous years. However, activity surrounding property transactions, especially in the low- to medium-priced residential segments, should continue to provide some momentum for the sector.

In a broader context, the ministry projects that Cambodia’s overall economic growth will reach approximately 6.3% in 2025, a slight increase from 6% in 2024, underpinned by advancements in the industrial, service, and agricultural sectors.

As Cambodia navigates this recovery phase, stakeholders are hopeful that strategic investments and a favourable demographic landscape will help pave the way for a more robust economic future.