National Bank of Cambodia Reviews Measure of Housing Prices

PHNOM PENH: The Asian Development Bank forecast last month that would have one of the lowest rates of inflation in Southeast Asia this year if global fuel prices remain stable.

After reaching 5.3 percent in 2022, Cambodia's annual rate of inflation dropped to 2.1 percent last year and is forecast at 2.0 percent this year.

That compares with 20.0 percent in Laos, 15.5 percent in Myanmar. 4.0 percent in Vietnam, 3.8 percent in the Philippines, 3.0 percent in Singapore, 2.8 percent in Indonesia and 2.6 percent in Malaysia. The only ASEAN members where prices are expected rise less than Cambodia are (Brunei 1.1 percent) and Thailand (1.0 percent).


In Cambodia, the most closely-watched measure of inflation is consumer prices.

The National Institute of Statistics monitors the prices of consumer goods and services, publishing an overall consumer price index (CPI) every month.

It also publishes separate indexes for particular items. These measure how much consumers are paying for things ranging from food, clothing, water, and electricity to health, transport, communications and education.

For example, the overall consumer price index in February this year was 0.7 percent higher than the same month last year.

The biggest gains were in the cost of transport, up 2.4 percent from February last year, and restaurant prices, which rose by 1.1 percent. These were offset by smaller increases for other items like communications, up only 0.1 percent.


With the boom in real-estate transactions in recent years, the National Bank of Cambodia launched a housing price index in mid-2022

Known as the residential property price index (RPPI), this new index — like the CPI — has a measure of overall prices, in this case for housing nationwide.

Data is based on details of housing loans by Cambodian domestic banks.

At 109 points in June 2022, the overall index for Phnom Penh and the provinces was 9 percent higher than 2020 when it averaged 100 points.

The index rose to a peak of 116 points in the middle of last year — 16 percent above the average for 2020 — before retreating to around 112 points at the end of 2023, where it remained early this year.

Unlike the CPI, the housing index has only two sub-indexes — one for Phnom Penh and another for the provinces. But this may be about to change.


According to the International Monetary Fund (), central bank staff recently “raised concerns about the trajectory of the price index” and asked for a review of the methods and software used.

The IMF accordingly sent a technical mission to Phnom Penh for five-days in January.

The team was led by Barra Casey, a senior economist at the IMF in Washington where he specializes in real-estate statistics.

Casey is a former central banker, with solid experience in the real-estate sector. He previously worked at the Bank of Ireland — a country whose property bubble burst in 2008, paving the way for a commercial banking crisis as the “Celtic Tiger” economy crashed.

During the mission to Phnom Penh, the team met with nine NBC staff including Dr. Khou Vouthy, deputy director-general for policy and international cooperation, and his deputy Mr. Ith Hero, who also heads the central bank's Statistics Department.

Casey's report, published on May 3, shows that concerns about the index's trajectory were justified.

As an example, it looks at the overall housing price index for the 18 months to June 2021.

The data published shows an increase of 16 percent. But updated data indicate that the index rose by only 11 percent — indicating the price increases were being overestimated.


The IMF review found that the central bank's monthly survey is based on hundreds of housing loans. The average monthly number was 880 last year, down from 1,260 in 2022.

NBC publication of the data is “very timely,” the report said. The central bank receives the data 10 days after the reference month and checks are normally completed by the 20th day, allowing publication at the start of the next month.

For example, data for May would typically be received by June 10, checked by June 20 and published in early July.

Information on houses includes the price, location and size as well as the type of property, the title, the number of floors and the date of construction.


Monthly surveys do not cover loans by foreign banks. Cash purchases are also not included. Nor are purchases financed by loans by property developers.

The surveys also exclude apartments. One reason is that purchases of apartments — at least on upper floors, not the ground floor — are largely by foreigners with loans likely to be financed by foreign banks.

To get a better idea of the total size of the market, the IMF recommended that the national bank combine its loan data with information from other sources like the General Department of Taxation under the Ministry of Economy and Finance.

“The NBC should devise a longer-term strategy to close the gap in coverage by researching new data sources,” the report said.

Given that it “may not be able to readily access transaction-level data from administrative sources, it was felt that listings information from real-estate websites may be the best option to research initially.”

For the medium term, the report urged the central bank to continue to use existing bank loan data — supplemented by additional data from micro-financial institutions which it has already started collecting. This is mainly for housing transactions in the provinces.


During the IMF mission, it was decided to amend loan criteria by lowering the minimum land area from 40 to 20 square meters.

It was also found that loans to property developers should be excluded as funds are used for purchasing materials and paying builders rather than buying a residential property.

The biggest change discussed in detail was extending the geography of the sub-indexes, currently limited to Phnom Penh and outside the capital.

With “sufficient observations within Phnom Penh”, the IMF recommended dividing the capital into three areas — Central and East Phnom Penh (eight khans), Inner Suburbs (four khans) and Outer Suburbs (four khans).


The IMF urged updated indices to be calculated and compared with published data by June. Improved methods could then be included in compiling the housing price indexes by December after deciding whether or not to revise the old data going back to 2020.

The IMF report also recommended that the NBC website publish details of the new method for calculating the indices.

Cambodian authorities are “strongly committed to making improvements to the methodology,” the IMF team found.

“Reliable property price indices and other indicators of real estate markets are essential for the assessment of developments and risks in property markets and understanding the linkages between property markets and financial soundness.”

And essential for the IMF's country surveillance too, of course.

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