Thailand
Cambodia: Call for easing of property buyers’ financial burdens
The Ministry of Economy and Finance (MEF) and the National Bank of Cambodia (NBC) called on real estate developers to ease payments conditions for their customers during the COVID-19 pandemic.
According to a joint statement, in the context of Coronavirus, the government has called on real estate developers to look at waiving penalties for late payments by those who have purchased homes or other property based on their personal situation.
Real estate developers are being urged to waive late payment penalties for those who have purchased homes in borey projects or condominiums in order to ease financial burdens caused by the pandemic.. All real estate developers must issue a protection policy to their customers and must implement this measure effectively from now until the end of March 2022, the statement said.
The MEF and NBC will continue to monitor new developments regarding the pandemic and collaborate in implementing the measures with banking and finance institutions and real estate developers.
Dr. Kim Heang, Regional Operating principal and Chif Executive officer of Khmer Real Estate Co Ltd, which is developing the KS Residence borey, approves of the move but questions whether real estate developers can afford to absorb the expense of waiving penalties for late payments.
He noted that owners and developers rely on monthly payments made by customers to meet bank loan obligations made towards the completion of their projects.
“In my opinion, it is difficult to implement because no developers have [sufficient money of their own] to build [projects]. They have to rely on many sources of funds. Furthermore, the statement from the government is not [an] order [of forced] implementation, it is just [a] suggestion,” Heang added.
“As businesspeople we will listen to the government and do whatever we can,” Heang insisted. “Government should call on [all] relevant stakeholders – real estate developers, banks, construction material suppliers and contract companies, so the situation will improve. If the government [just calls] on real estate developers to do it alone and [some] don’t, it [will] not work.”
Heang noted that the government itself has to ensure the base cost for affordably priced construction projects. He added that the high cost of boreys and condominiums stem from the cost of land, construction, administration fees, taxes and licensing, as well as infrastructure connection (water and electricity).
Heang suggested that the government should make these things cheaper for developers by connecting electricity and water to construction sites at its expense, reducing the tax on profit (currently 20 percent) and facilitating the administration of documents, permits and licensing to be quicker. Then developers can adjust their property pricing.
Century 21 Cambodia Executive Director Grace Rachny Fong said that in 2020 some housing project owners had also assisted or facilitated payment conditions for their customers. She added that the statement from the MEF and NBC is a win-win solution for real estate developers and customers during the current situation. “This move is to ensure that real estate developers are able to continue their construction and the customers are able to continue their payments” she added.
Source: https://www.khmertimeskh.com/50829198/call-for-easing-of-property-buyers-financial-burdens/