As people continue to pour into the capital, low-cost housing developments are growing fast, with the government predicting that eight million people will be living in the Kingdom’s cities by 2030.
This contrasts with previous years, which saw demand for higher-end residential projects rather than affordable housing.
Cambodian Valuers and Estate Agents Association (CVEA) President, Kim Heang, said almost 80 percent of housing construction is now focused on the low-income market.
“Houses costing below $40,000 per unit are seeing strong demand, which is being driven by solid economic growth and a youthful population. This trend is likely to continue,” he said.
Heang said homes in Cambodia are divided into three categories – affordable housing at below $40,000; mid-range residences of between around $48,800 and $70,000; and higher-end houses which sell for $80,000 and upwards.
Last year, the investment value of residential construction was over $2.2 billion, according to a report from the Ministry of Land Management.
The ministry’s study of the Kingdom’s urban development framework found that about 4.5 million people were living in towns and cities in 2014 – equivalent to 27.1 percent of the total population.
This number will continue to rise to 7.92 million, or more than 44 percent, by 2030, it found.
Pen Sophal, the ministry’s secretary of state, said on Tuesday that in the next 15 years, the country would need more than one million new houses, of which about 800,000 needs to be located in towns.
Lucky Realty Co Ltd CEO Dith Channa said the Kingdom’s economic growth has provided more people with income to buy houses, while the banking sector has also developed to assist purchasers.
“Currently, most of the developers are moving toward low-cost housing developments. If you build high-end homes, it’s hard to find buyers,” he said.
Sok Kao, the assistant to the sales manager for the housing project VIP Borey in Phnom Penh, said the company is now working towards building many low-cost housing units as the market is flourishing.
“The company’s housing sales are doing really well because they are affordable, while instalment payments also enabled people to purchase homes,” he said. Its affordable housing developments are mostly located in the outskirts of the capital.
Sam Sovannak, a teacher at a private school in Phnom Penh, has bought a house located along National Highway 3. Sovannak and his wife were previously renting a house in the city for about six months when they decided to buy a house worth over $30,000.
“I wanted my own home for a very long time, but previously, the companies just built high-end houses and had no easy payment terms as they do now,” he said. Sovannak said he has to pay $400 a month in instalments."
Minister of Land Management, Chea Sophara, said last year that the government is finding ways to offer affordable housing to low-income Cambodians.
He said his ministry is working with the Ministry of Economy and Finance to set prices of low-cost housing, and looking into providing tax incentives and instituting regulations to encourage the private sector to develop these projects.
Currently, the government has cooperated with three investment companies to offer affordable housing projects.
They are The Worldbridge Land’s project, located south of Takhmao City in Kandal province; The Bun Chhay Bo project, along National Road 5 in Prek Pnov district and the Japanese –developed residential project Arakawa, located in Sen Sok. All three are in the process of construction.