Despite a Credit Bureau Cambodia (CBC) report showing a 36 per cent quarter-on-quarter fall in mortgage loan applications in the second quarter of this year, the private sector has retained its optimism in the Kingdom’s housing sector.
Hout Ieng Tong, chairman and general manager of microfinance institution Hattha Kaksekar Limited (HKL), said mortgage lending at his company has grown.
“I have yet to see a decrease in the number of applications for mortgages, our figures still show an increase in mortgages.”
He said that people are still in need of loans and that there are no signs that the housing sector is at risk.
“I think the sector is still growing well because people still have good incomes, good livelihoods, and overall, our economy remains stable,” he said.
Cambodia Post Bank CEO Toch Chaochek said mortgage applications at his bank increased 29 per cent quarter-on-quarter in the second quarter of this year, from 801 to 1,036 applications, with lending volume increasing from $30 million to $39 million.
“I don’t think the real estate sector will be affected, our mortgage lending is on the rise as usual,” he said.
However, he did not refute the CBC report, saying that the findings may merely stem from seasonal trends.
“There were many holidays [during the period] so the number of loan applicants may not be so high,” he said.
The report showed that the total consumer loan balance in Cambodia reached $7.16 billion at the end of June, but it did not disclose the volume of mortgage loans in the second quarter.
However, as of the first quarter, the value of home loans exceeded $3 billion, it showed. As of the first half of last year, the total mortgage value was more than $2.5 billion.
Advance Real Estate Co Ltd CEO and founder Po Eavkong said the decline in mortgage applications may reflect stiff competition in the banking sector, while rising housing prices may also contribute to the drop.
“I see that housing supply is still growing normally, but annually increasing home prices is a problem for those with stagnant incomes who want to borrow impossible [amounts] from banks,” he said.
Cambodian Valuers and Estate Agents Association president Chrek Soknim said there has been a rise in the number of flat sales in gated communities, but most are bought as investments.
“Due to political stability and economic and housing growth, there are more people buying as investments than for residence,” he said.