Affordable housing market boost its strong demand from local buyers, with price up to $50K surprisingly shows impressive transactions, in contrast to the price of residential above $200,000 which presents a slow rise.
Despite the current covid-19 situation, there’s an increasing number of middle-class people, leading to the continuous impressive transaction of affordable housing, Mr. Long Kim Sour, CEO of Century 21 Advance Property, has said.
Everyone needs a place to live, and that’s why residential property will always be in demand, particularly affordable housing.
Many affordable housing projects have shifted their direction to suburban areas of Phnom Penh, since the land prices located outer city are still lower than the inner city.
As reported by Z1 Data Co., LTD (Cambodia), a huge number of housing projects are developing in four districts – such as Dangko Komboul Prek Pnov, and Po Sen Chey. These districts combined accounted for 53% of all the projects in Phnom Penh as of 2020.
According to Vongsey Vissoth, Secretary of State at the Ministry of Economy and Finance, the demand for housing prices under $70,000 is increasing partly due to stamp duty tax exemption.
Stamp duty exemption on ownership transfer or purchase of real estate worth $70,000 or less is extended till the end of 2022. It was first introduced by Prime Minister Hun Sen to waive the taxation since early 2020, in a move to reduce the burden on taxpayers. The stamp duty is levied at a rate of 4 percent on the transfer of ownership or the right of possession of immovable property.
Data from the Ministry of Economy and Finance showed that the demand for housing rose from 2270 units in 2019 to 4840 units in 2020, which indicated a 75% jump.
The rise of affordable housing also stems from investors who are now mainly focused on local buyers, due to a large number of foreigners still unable to return to the kingdom.
“New projects continue to be established one after another, and there’s no sign this is going to be oversupplied. On top of that, some property developers are making easier way for home buyer, including easing down payment,” according to Grace Rachny, CEO of Century 21 Cambodia,
It is true that affordable housing will remain in demand even years from now because people will always need a place to live, she added.