Construction of five affordable housing development projects in the Kingdom is on track for completion with 50-90 percent of the project already completed, according to the Construction Ministry’s annual report.
Granted the construction permit by the ministry, two are located in Phnom Penh, two in Kandal province and Poipet’s Banteay Meanchey province city, with a combined 8,331 houses or units, the report noted.
Local firm WorldBridge invested $100 million, commenced and construction in 2017 for the first affordable housing project in Cambodia called Serey Mongkul Satellite City on 45 hectares of land in n Kandal’s Saang district – currently, 90 percent completed.
Borey Sen Monorom, another affordable housing project in Kandal province developed by local company B&BM Development Co, Ltd, has finished about 50 percent of its construction so far.
Affordable condominium Arakawa project located in Phnom Penh’s Sen Sok district reached 50 per cent of completion; while another affordable housing Grand Park in phase one has finished nearly 70 percent of its construction, according to the ministry’s report.
Hong Socheat Khemro, General Director of the department of housing at the ministry, stated the ministry has already issued construction permits to M R Sokha Resident Group for 4,296 houses in Poipet, Banteay Meanchey province, in late 2019.
He said the department of housing has also been facilitating and consulting on the architect’s plans and application for affordable houses for two companies – Ly Brothers Ltd, with 1,927 houses in Siem Reap province, and Phnom Penh Land, with 227 houses in Kandal province.
“The government is continuing to try to attract non-governmental organisations and investors to invest in affordable housing projects to sell to lower-income people and to build homes resilient to climate change,” he said.
Long Thareth, CEO of B&BM Development, said his company sends a report to the ministry every month on the progress of the projects.
He added that about 70 percent of the total units have been sold out. With rising demand, developers can sell if they have a project, said Chrek Soknim, president o Cambodian Valuers and Estate Agents Association.
He said the price for the affordable housing project is below $30,000 per unit, it potentially supports the lower-income group particularly factory workers, and civil servants.
“If a developer intends to invest in this segment, land price is affordable because it is located 20 kilometres from Phnom Penh. The land price is below $40 per square metre,” he explained.
In 2017, the affordable housing policy was drawn up by the government aiming to improve the lives of low and middle-income earners by encouraging developers to shift their focus to low-cost housing development.
The policy provides incentives for developers such as tax breaks and reduced red tape including approvals for construction permits and business licence, while it also allowing for special rates for income tax, property tax and value-added tax.
To enjoy the incentives, however, projects must comprise 100 low-cost housing units priced between $15,000 and $30,000. The projects must be within 20 kilometres of Phnom Penh city and must feature green spaces. Developers must also cooperate with financial institutions to create credit schemes with low-interest rates to enhance the project’s affordability.