As bank loans continue to play a growing role in helping Cambodians purchase their own homes, ACLEDA Bank has reported an increase of about a third in the value of its mortgages in 2014.

Cambodia’s largest commercial bank provided nearly $140 million in mortgages in 2014, a 30 per cent increase from 2013’s figure of $107.3 million.

The number of customers obtaining mortgages rose as well, with 6,068 clients in 2014 compared to 5,066 the year before – an almost 20 per cent increase.

So Phonnary, executive vice president and group chief operations officer, pinned the growth on increasing population, steady GDP growth and demand for more modern homes.

“About 7 per cent of all the loans we made in 2014 were mortgages, and the bank is planning to provide about $170 million worth of mortgages this year,” she said.

“We focus on the character of borrowers, their collateral, if they have a stable income and their overall ability to pay back,” she said, adding that the average interest rate was about 12 per cent a year.

Sear Chailin, chief executive of CL Realty, said the increasing number of housing loans from ACLEDA Bank was a positive sign for the real estate sector in Cambodia, as it meant more people were able to buy homes.

However, he warned that “people seeking out a mortgage should look at the interest rate before deciding to get the loan, because they can lose money if they don’t carefully study it”.

Nguon Chhayleang, chief executive of Regent Realty, said increasing mortgages were good for the economy because they made housing more affordable.

“More homes means more construction, which means more employment in the economy,” he said.

Chhayleang added, however, that mortgage rates are still high in Cambodia compared to more developed property markets in ASEAN such as Thailand and Singapore.

“Banks still do their risk assessments and think the property market is not so stable, but I think that trend [of high interest rates] is changing with the arrival of more banks and increasing competition.”