Despite falling mortgage applications, private sector optimistic
Despite a Credit Bureau Cambodia (CBC) report showing a 36% quarter-on-quarter drop in mortgage applications in the second quarter of this year, the private sector has remained bullish in the Kingdom’s housing sector.
Hout Ieng Tong, chairman and managing director of Hattha Kaksekar Limited (HKL) microfinance institution, said mortgages in his business had increased.
“I have yet to see a decrease in the number of mortgage applications, our numbers still show an increase in mortgages. “
He said people are still in need of loans and there is no sign that the housing industry is in jeopardy.
“I think the sector continues to grow 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 from his bank increased 29% quarter-on-quarter in the second quarter of this year, from 801 to 1,036 applications, with a volume of loans from $ 30 million to $ 39 million.
“I don’t think the real estate industry will be affected, our mortgages are up as usual,” he said.
However, he did not refute the CBC report, saying the findings could simply come from seasonal trends.
“There were a lot of vacations [during the period] so maybe the number of loan seekers is not that high, ”he said.
The report showed Cambodia’s total consumer loan balance to reach $ 7.16 billion at the end of June, but it did not disclose the volume of second-quarter mortgages.
However, in the first quarter, the value of home loans exceeded $ 3 billion, he showed. In the first half of last year, the total value of mortgages was over $ 2.5 billion.
Advance Real Estate Co Ltd CEO and Founder Po Eavkong said the drop in mortgage applications may reflect stiff competition in the banking industry, while rising house prices may also contribute to the decline.
“I see that the housing supply continues to grow normally, but the annual increase in house prices is a problem for those with stagnant incomes who want to borrow impossible. [amounts] banks, ”he said.
Cambodian Association of Appraisers and Estate Agents president Chrek Soknim said there has been an increase in the number of apartment sales in gated communities, but most are bought as investments .
“Due to political stability and economic and real estate growth, there are more people buying for investment than for residence,” he said.