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The use of mortgages for house purchases increased exponentially throughout 2011, as home buyers capitalised on the nascent market, according to industry experts.

The relatively infant mortgage loan market, which came into existence in 2008, has played a key role the development of the property and construction sector, said In Siphann, ACLEDA Bank vice president and head of the company’s credit division.

“Our observations show the use of home loans services has led to an increase in house transactions,” he said, adding that transactions are still some way off hitting the figures seen during the boom peak of 2007.

ACLEDA Bank statistics showed that it provided some 3244 mortgage loans, worth US$75 million in the first 11 months of 2011, a 30 per cent year-on-year growth.

“We give mortgage loans for up eight years, providing clients with loans up to $7 million,” In Siphann said.

He added that the ACLEDA Bank also offer others services loans which totalled$160 million with it provided some 116,000 customers for the first eleven months of 2011.

Still, some industry experts and economists believe interest rates, which are currently capped at 15 per cent, need to be reduced and applications requirements eased.

Cheng Kheng, managing director of Cambodia Properties Limited told the Post that while continual growth and involvement from the banking sector boosted investment in the property market through 2011, some amendments are still needed.

“The increase in the number of banks provides customers with more choices, especially for home loans, however, the banks still require a lot of documents and offer high interest rates,” he said, adding that if rates were reduced more local and foreign investors would be willing to take out loans.

Cheng Kheng noted that a number of foreign investors, primarily from Japan, Malaysia and Vietnam, re-entered the market through 2011.

Plong Sophandy, administrative manager of housing development company Borey Delta Garden echoed these sentiments.

“If the banks can ease up on the [loan] requirements, clients will have more of a choice regarding what sort of house they can own,” she said.

Although the property sector continues to recover from the economic downturn, it remains at the mercy of major industries, according to Chheng Kimlong, business and economics lecturer at the University of Cambodia.

“The [regional and global] state of the banking sector and oil prices will push real estate and construction activities, as it did pre-financial crisis,” he said, adding that these factors determine the stability of the industry.