Cambodia Real Estate Market 2026: A Closer Read

Before the numbers

Cambodia's Q1 2026 credit data lands inside a longer story. Between 2015 and 2019, the country averaged approximately 7% annual GDP growth. Total loans expanded 26% in 2019 alone, reaching 120% of GDP. The system was running 3.1 million active credit accounts. Bank NPLs sat at 2.2%, microfinance NPLs at 1.1%. The pre-pandemic baseline was, by any measure, clean.

The NBC's own 2019 Annual Report flagged the risk in writing, noting that Cambodia's economy could face exposure from high credit growth to construction and real estate. That warning was published before a single case of COVID had been confirmed anywhere in the world.

In 2020 the economy contracted 3.6%, its first recession in twenty-five years. FDI into construction and real estate fell 10.6% in the same year. Recovery followed: 3.1% in 2021, 5.1% in 2022, 5.0% in 2023, and 6.0% in 2024. The macro picture healed. The loan book did not heal evenly. By the end of 2024, the bank NPL ratio had already tripled from its pre-pandemic baseline. The Q1 2026 data is not where this story began.

Cambodia's banking sector published its Q1 2026 small business credit data this week. Buried inside the numbers is a 9.8-point gap that should reshape how investors read the Cambodia real estate market in 2026. In Sihanoukville, 19.4% of construction loans are now ninety or more days past due. In Phnom Penh, the same figure is 9.6%. Both regions sit inside the same country, the same regulatory system, the same currency band. They are no longer the same market.

The National Bank of Cambodia's release covers a $37.4 billion loan book, growing at less than 1%. The national 90-plus day delinquency rate has reached 7.7%, the highest on record. The temptation, when a single figure crosses an uncomfortable line, is to read the whole country through it. That reading misses the point of what the data actually shows.

The headline that isn't the story

A 7.7% national NPL figure is what you read when you don't know which submarket you're buying into. The variance underneath that number is wider than the number itself.

By region: Tonle Sap, the area around Siem Reap, has crossed 10% for the first time on record, the first region in Cambodia's modern banking history to breach that threshold. It sits at 10.4%. The Plateau region in the northeast is at 9.9%. The Coastal region, anchored by Sihanoukville, registers 8.5% overall. The Plain, which contains Phnom Penh, sits at 6.7%, the lowest in the country.

By product, construction is the only sector above 10% nationally, at 10.2%. Working capital is at 8.7%. Agriculture is at 7.6%. The "other" basket, which captures a range of consumer and small commercial lending, is at 3.5%.

The story in the data is not that Cambodian credit is deteriorating. The story is that the deterioration is geographically and sectorally precise. The risk is concentrated. By extension, it is also avoidable.

What Phnom Penh's 6.7% actually says

The Plain region holding under 7% while the national headline climbs above it is not a statistical coincidence. It reflects a longer pattern. Across most economies, capital cities dip less in downturns and recover faster than secondary markets. The buyer base in a capital is deeper, more diversified by income source, and less dependent on any single industry. When credit cycles tighten, capitals absorb the shock with lower volatility. When the cycle turns, capital gains in the capital tend to outperform the country average. The pattern holds across Southeast Asia and across Western markets. It is one of the most consistent observations in real estate investing.

Phnom Penh's behaviour in the Q1 data is consistent with that pattern. The specific structural drivers are three: formal-sector employment in manufacturing and services, a more liquid resale market for property, and a transaction base that does not depend on tourism arrivals.

Phnom Penh's construction loan NPL rate is 9.6%. That is elevated, and worth taking seriously. It is also less than half of Sihanoukville's coastal construction figure. For a developer carrying construction debt, that gap is the difference between refinancing on workable terms and refinancing not at all.

Garment exports grew 22.2% year-on-year in the first half of 2025. Manufacturing remains the engine of the formal labour market, and the formal labour market is what services consumer credit, mortgage origination, and the rental demand that sits underneath investment property economics in the capital. Nothing in the Q1 data disrupts that mechanism.

Sihanoukville and the legacy of a capital cycle

The 19.4% construction NPL figure for the coastal region is not a 2026 story. It is the delayed accounting of a 2016 to 2020 capital cycle.

Between 2016 and 2019, Chinese capital moved into Sihanoukville faster than the local property absorption rate could accommodate. Two forces drove the inflow: gaming-related demand, and speculative seaside development premised on tourist and second-home buyers that were always going to take time to arrive at scale. Towers were financed against assumed casino and gaming revenue that, after the 2019 online gaming ban and the subsequent pandemic closures, never materialised at the level the underwriting required. The seaside thesis ran into the same absorption problem. The buildings still exist. The loans against them are now sitting in the 90-plus bucket.

The inventory itself is the second problem. A meaningful share of the distressed projects fall into one of three categories: incomplete, never properly started beyond foundation work, or finished as generic concrete boxes built to no clear specification. The first two cannot generate cash flow at all. The third can, in theory, but the unit fundamentals rarely support the rental yields or resale gains that would justify acquisition at anything near original pricing. Absorption of this overhang will take multiple cycles, not quarters.

This is what a credit cycle looks like in arrears. It is also why the 19.4% number, while real, is not a forward-looking signal in the same way the national figure is. The losses are largely embedded. They are being recognised now, in part because the National Bank of Cambodia's pandemic-era loan restructuring directives expired on 31 December 2025

with no extension granted.

Those directives, in force from 2020 onward, allowed banks and microfinance institutions to defer classifying distressed loans as non-performing. The intent was reasonable at the time: keep the credit system functioning through a shock. The effect, over five years, was that real credit deterioration accumulated below the surface of the official NPL ratio. During 2025 alone, $1.9 billion in loans across 207,830 accounts had been restructured under those provisions.

With the mechanism gone, loans must now be classified by their actual repayment status. The Q1 2026 numbers therefore reflect two things at once: new stress that is genuinely emerging, and previously deferred stress that is now being formally counted.

Our reading of Sihanoukville is narrow as a result. There are tiny pockets within the market that warrant a detailed look, but they require project-level due diligence rather than market-level enthusiasm. Returns and resale outlooks should be modelled conservatively. The overhang of distressed inventory has to clear before any broad recovery is meaningful, and that clearing has not yet started.

How a professional reads this

Three things are worth saying clearly.

First, the banking system is provisioned. Banks are holding reserves against approximately 71% of gross NPLs, leaving a net NPL ratio of around 2.4%. The sector loan-to-deposit ratio has improved to 95%, the strongest reading in five years. This is not a system in distress. It is a system carrying recognised losses with capital behind them.

Second, the geographic divergence in the data is the most important investment signal Cambodia has produced in recent quarters. Submarket selection is now the dominant variable in any property thesis. Phnom Penh's residential and commercial inventory is operating in a fundamentally different credit environment than the coastal towers a four-hour drive away. Pricing a Cambodia exposure as a single national bet is how investors leave money on the table, or worse.

Third, the sectoral story is also clear. Construction lending stress is real and concentrated. Working capital and asset finance show secondary pressure in the northeastern provinces. The "other" basket at 3.5% indicates that consumer-side credit, which is what most retail real estate demand ultimately rests on, is still functioning.

The full cross-table

90+ DPD by Product / Region	Coastal	Plain	Plateau	Tonle Sap
Working Capital	8.9%	7.7%	10.7%	11.9%
Agriculture	8.4%	6.2%	9.8%	8.4%
Asset Finance	6.6%	5.8%	13.3%	12.5%
Construction	19.4%	9.6%	5.3%	12.1%
Other	6.3%	3.1%	4.4%	4.6%

Source: NBC Q1 2026 data via Cambodia Investment Review, May 18, 2026.

The Coastal construction figure of 19.4% is the highest single data point in the release.

What this means for the Cambodia real estate market

The national small business 90-plus day delinquency rate has moved from approximately 2% in 2019 to 7.7% today, roughly a fourfold increase over six years.

The Q1 2026 release is not a crisis bulletin. It is the cleanest read on Cambodian credit quality the market has had since the pandemic, because the restructuring provisions that masked the underlying picture for five years have finally expired.

What the data shows is that Cambodia has become a market of submarkets. The headline NPL rate matters less than where, specifically, the loan sits, what it is financing, and what cash flow it is collateralised against. Phnom Penh is doing what a capital city is supposed to do under macro pressure: holding the median.

The Cambodia real estate market in 2026 is not a single market, and the credit data has now made that explicit.

Investors who price each submarket against its own credit environment will make different decisions than investors who price the country as a single block. The work done at this stage rarely looks urgent, but it usually pays the most.

At My First Corner, this is the kind of analysis we run before a client commits capital. The conversation is available when it is useful.