PHNOM PENH: Cambodia's Ministry of Land Management, Urban Planning and Construction (MLMUPC) recently met with the Cambodian Microfinance Association (CMA) to discuss collaboration in the real estate sector.

According to the CMA, the meeting focused on a comprehensive discussion of the real estate sector in Cambodia. This included examining both the current challenges and potential opportunities within the market.

A key aspect of the discussions, as highlighted by Deputy Prime Minister Say Samal, centered on the role of financial institutions. DPM stated, “All microfinance banks and financial agencies are important strategic partners in supporting the financial industry and non-banking revenue and fiscal revenue, the real estate and construction industry, as well as the establishment of a culture of mortgage lending that has made a significant contribution to building and sustaining the Cambodian economy.”

H.E. Dith Nita, Chairwoman of the CMA, expressed her full support for the Ministry's initiatives and a strong commitment to aiding the government in resolving challenges within the real estate sector.

However, she identified specific challenges faced by banks and financial institutions, requesting the Royal Government of Cambodia's support through measures such as tax breaks, lower interest rates, and credit guarantees for potential loan defaults.

The participation of representatives from over 120 banking and financial institutions further underscores the industry's commitment to working with the government on real estate development.

A new report by the World Bank this month confirmed the sluggish Cambodian property development sector in the first quarter of 2024. The value of approved real estate development projects continued to decline, dropping 38.8% year-on-year to US$786 million.

This decline follows a short-lived revival in 2023, where investor appetite for real estate, particularly housing, had shown signs of recovery after the pandemic's heavy impact during 2020-2022.

However, the World Bank report highlights that ongoing housing price corrections, despite a limited supply of affordable housing, continue to dampen construction activity.

This meeting signifies a collaborative approach between the Cambodian government and financial institutions in fostering a healthy real estate sector. By focusing on challenges and opportunities, particularly in facilitating loan access, this dialogue suggests a proactive approach to supporting the industry's continued development.