As more young and middle-income Cambodians enter the housing market, an increasing number are taking out mortgages in order to purchase their first homes.

At Acleda bank, 22 per cent more mortgages were taken out in the first three quarters of 2014 compared to the same period in 2013, according to a company announcement from October.

Thanks to these mortgages, more first-time buyers could afford a home, said Chrek Soknim, chief executive of VTRUST property firm, who added that the process benefited the banking sector as well.

“The growth of the sector will boost property transactions, while mortgages obtained through banks are win-win for both clients and the banks themselves as they can both share the profits.”

Asia Real Estate Company general manager Po Eavkong said mortgages helped boost the economy as well, because home purchases created jobs for people in the property and construction sectors. However, he added that “borrowers have to have a clear goal, and the loan management of the banking system must be thorough to prevent risk and potential financial crises in the future.”

At Acleda Bank, mortgages run up to 10 years and have an average interest rate of about 12 per cent, while customers have to pay 30 per cent of the property’s total value before obtaining a loan, said So Sophonnary, Acleda’s executive vice president and chief operations officer.

“Even if they rent the home for a long time, they remain tenants, but they can become homeowners if they use a housing loan combined with a stable income to pay it back,” she said.