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Logo of Phnom Penh Post newspaper Phnom Penh Post - Mortgage boom in Cambodia

Mortgage boom in Cambodia

National Bank of Cambodia

The number of housing loans taken out by Cambodians has been grown noticeably in recent years as the economy develops, incomes grow, knowledge about financial services becomes more widespread, and more recently married people are able to afford their own houses, said industry.

According to data from the National Bank of Cambodia (NBC), total housing loans in the nation’s banking sector has been increasing annually. Total housing loans reached $120 million in 2010 and climbed to $274 million in 2011. The figure reached $330 million last year, a 20 per cent year-on-year increase.

In the first two months of this year, total housing loans reached $344.5 million.  

Nguon Sokha, director-general of National Bank of Cambodia, told Post Property that home loans services provided by commercial banks in the country are meeting the growing demand, and better offers highlight the healthy development of the financial sector.

“As a country with large young population, the demand for housing in Cambodia is also huge,” said Nguon Sokha. “The growth of mortgage loans can be translated to the positive view of suppliers [commercial banks] who are confident about Cambodia’s economic and political stability.”

While terms and conditions differ from one bank to another, annual interest rates have fallen to about 10 to 15 per cent, thanks to the benefit of competition in the market.

In Channy, President and CEO of ACLEDA Bank, told Post Property that total housing loans in his bank reached $89 million in the first quarter of this year, an 18 per cent increase compared to the same period last year. He added that ACLEDA is offering a 12 per cent interest rate annually on home loans, with repayment periods up to a maximum of 20 years.

“The number of housing loans is increasing every year, parallel to the growth of the Cambodian economy,” said In Channy, “The proportion of housing loans is about 6 per cent compared to the total loan outstanding.”

Kevin Lim, CEO of First Finance, a microfinance institution specialising in home loans, said that up to the first quarter of this year the total housing loans made by his institution reached $1.5 million, up about 30 per cent from the corresponding period last year.  

Lim explained that the demand had picked up due to changing social attitudes, as many young married couples just starting out prefer to live in their own homes instead of with one set of parents.

“Looking at the future trend, I am optimistic that home loans will still grow, which will help to extend our outstanding loan portfolio,” he said.

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