NBC: Credit Growth in Construction & Property Decelerates, Easing Concerns on Overheating Market

• 3 June 2021
• Local News
• 1915 Views

Loans to construction and real estate activities in 2020 expanded at a slower rate of only 23%, as the construction boom stalled due to the pandemic. This deceleration of credit growth has eased some concerns on the overheating property market, according to the National Bank of Cambodia (NBC)’s Financial Stability Review 2020 published on 31 May.

By sector, credit growth in construction remained strong with an annual growth rate of 26.3% in 2020, a slight decline from 29.1% in 2019.

Meanwhile, the growth of outstanding loans for real estate activities has decelerated to an annual growth rate of only 20.1%, compared to 40.3% in 2019. This is due to the slow development in real estate projects and sale operations.

According to NBC, this slowdown helped ease the overheating property market that is always a concern among international monetary organisations such as the ADB, IMF, and World Bank. (Read more)

As a percentage of total credit, the construction and property sector absorbed quite a large amount. In 2020, shares of credits provided to construction, property, and mortgages accounted for approximately 32% of the total credits. By sectors, the shares are 10.2%, 8.7%, and 13.7%, for construction, property, and mortgages respectively.

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