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Concerns over affordability of capital’s homes as prices rise

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A borey in Phnom Penh Thmey in 2016. Heng Chivoan

Concerns over affordability of capital’s homes as prices rise

As Phnom Penh’s housing development boom sees prices raised year-on-year, insiders have voiced concerns that lower and middle-income earners can no longer afford a house.

Data from the Ministry of Land Management, Urban Planning and Construction shows that 2,047 construction projects have been approved in the first half of this year, up from 1,643 during the same period last year.

Kim Heang, the regional operating principal at real estate franchise, Keller Williams Cambodia, said prices continue to rise gradually.

“The problem is occurring right now. There’s no need to wait until later . . . there are many houses left unoccupied.

“The rich buy houses for delayed benefit, while many people are unable to buy them because of the continually increasing prices,” he said.

Heang said houses in the capital’s outer districts are currently valued at more than $40,000 per unit, which is too much for civil servants and those who work in the industry and service sectors, whose incomes range between $250 and $500 per month.

The price of units in Phnom Penh’s gated communities ranges from $70,000 to more than $100,000, while the cost of villas ranges from $200,000 to $300,000 and up.

Key Real Estate Co Ltd founding director Sorn Seap said the government’s policy to develop affordable housing on the outskirts of Phnom Penh is an adequate solution for low and middle-income earners.

“The state should develop more affordable houses in the outskirts, as land prices there are still low,” he said.

However, Seap noted that houses in gated communities which are worth more than $100,000 are currently the best selling.

“We think those who can buy a house worth $100,000 do, because gated communities have good infrastructure, water and electricity. There is security as well,” he said.

Heang said the government should encourage private companies to invest in affordable housing on state land and bid for open and transparent investment projects.

“The state should not sell public land to the private sector, but instead put it up for bid by companies to develop affordable housing transparently and without corruption.

“Common people such as service staff will obtain real benefits. Otherwise, only a few dozen people will benefit,” he said.

The government has collaborated with three investment companies to develop affordable housing projects.

First is Worldbridge Homes Co Ltd’s project, which is located in the south of Kandal province’s Takhmao town.

Second is Bun Ches Group Co Ltd’s project, along National Road 5 in the capital’s Prek Pnov district and finally, a shared-building development by Japanese company Arakawa Co, which is located in Phnom Penh’s Sen Sok district.

All three projects are currently under construction.

Worldbridge Homes general manager Yuk Sothirith said Phase I of the firm’s project is 70 per cent complete and set to be fully completed by the end of next year.

“Affordable housing projects are part of the poverty reduction policy, which supports the government’s implementation of the National Housing Policy,” he said.

Sothirith said his company will sell units at $25,000 without interest for two years.

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