The government is incentivising the private sector to build up to 1 million more units of sustainable and affordable housing in the Kingdom.

The policy was discussed during the Rainmaking Cambodia webinar by Benghong Socheat Khemro, director general of the general department of housing at the Ministry of Land Management Urban Planning and Construction.

The Rainmaking webinar series is being co-hosted by the Good City Foundation, a Hong Kong-based nongovernmental, nonprofit multilateral development organisation, and InvesHK. The Cambodia event marks the second of 10 conferences held in strategic locations in emerging Asia and Africa markets between May 24 and 28.

Keynote speakers included the director general, Yamin Xu, China & ASEAN Lead – IoT & Urban Transformation Platform at the World Economic Forum and Kheang Puthy, president of the Cambodia Real Estate Association.

During his presentation the director general stressed that the government of Cambodia was committed to increase affordable housing specifically in places of major urban migration, such as Phnom Penh, Siem Reap, Sihanoukville and Battambang.

He went on to add that the government was looking into various tax exemptions and incentives, such as a reduction in withholding, income and value-added (VAT) taxes for companies prepared to invest in affordable housing. He stressed that developers would need to be creating affordable housing to qualify for these benefits and that the government benefit plan was developed to ensure developers made a profit as they did so.

Government initiatives in creating sufficient infrastructure, such as connections to roads, water supplies, drainage and sewage systems, as well as improvements to the national electricity grid also provide the groundwork necessary for the building of affordable housing.

To qualify as affordable housing, units are to cost around the $30,000 mark, as per the universal definition of affordable housing based upon the current average earnings of Cambodian citizens.

The minister was followed by Kheang Puthy, president of the Cambodia Real Estate Association, who pointed out the many hurdles in creating housing that citizens can afford, specifically high interest rates and pricing. Current interest rates on housing loans in the country are 8 percent and he suggested that the government and banks could do more to help reduce costs to first-time buyers.  As an example, at current interest rates, typical monthly mortgage costs are roughly $250 to $300 on average, far above the ability of garment workers to sustain affordably.

According to 2021 data provided by Salary Explorer, an international salary comparison and career resources website for both employees and employers, the median average wage in Cambodia is around $812 per month, but 25 percent of the population earn less than $490 monthly. The government has set the minimum wage for garment workers at $192 per month.

During  the question and answer session, the director general asked Yamin Xu what can be learned from China about affordable housing and specifically which Chinese cities Phnom Penh could emulate.

His answer noted that  all cities were different with their own unique challenges, but parallels could be drawn from the development of Kunming, the capital of Yunnan, and Chengdu, a sub-provincial city and the capital of Sichuan.

• Tags: affordable housing, private sector