Phnom Penh Post, Issue 15 / 15, July 28 - August 10, 2006
Cambodia's nascent financial services industry will take a step forward in August with the launch of home loan mortgages from ANZ Royal Bank.
Beginning next month, customers of the bank will be able to borrow up to 60 percent of the purchase price of their home and spread the repayments over a period of up to 15 years.
This, according to its Chief Executive, Dean Cleland, will bring home ownership to those that could only have dreamt about it before.
"When we opened our doors in September last year we did so with the promise that we would bring new and innovative products and solutions to the market," Cleland said. "By launching a range of home loan products with an ability to spread repayments over a term of up to 15 years we believe we are keeping to our promises."
Other banks operating in Cambodia do provide home loans but they are either tied to in-house property developments or are of a short tenor and have to be repaid over a much quicker period, making repayments often unaffordable. With initial interest rates set at 9.9 percent per annum variable rate, ANZ Royal aims to expand options for buying a home.
The bank's criteria stipulate that borrowers must have been in continuous employment for a period of two years and that repayments do not exceed more than 35 percent of their monthly gross salary. Land must be registered by the local Cadastral Office, responsible for issuing registered land certificates. The bank will not lend against unregistered properties.
Cleland concedes that the lack of registered land titles in Cambodia will hamper the efforts to provide home loan mortgages.
"We have little choice, since the land title is the only document which provides proof of ownership and this is a must if we are to safely lend into this market," he said "That said, the number of registered land titles is growing daily and there's nothing to stop sellers applying for a land certificate at any time to help them sell their home to an ANZ Royal customer."
The bank currently pays 4 percent interest on a 12-month term deposit. The bank says its interest rates are linked to US Federal Reserve rates (currently 5 percent for overnight cash). Cleland says this means interest rates can go up as well as down - something his front-line sales staff will be required to communicate to applicants.
"As a responsible bank with an international parent [ANZ Banking Group] we have no wish to find ourselves with the unenviable task of having to sell someone's home because they are unable to afford to make repayments," he said. "For this reason we are at pains to make sure that an increase in global interest rates isn't going to cause too much discomfort to our borrowers."
The availability of long-term mortgages could well give an added boost to what is already viewed by some as an overheating housing market. But Cleland disagrees.
"By spreading home ownership across a much wider market we believe that this is likely to bring more realistic and sustainable values to the housing market. At present home ownership is restricted to a very few wealthy Cambodians - we're simply giving everyone else an opportunity to build a stake in their future too."
ANZ Royal Bank is 55 percent owned by ANZ Banking Group and 45 percent by the well known locally incorporated Royal Group headed by Okhna Kith Meng.
The bank has four branches in Phnom Penh and two in Siem Reap. Next month will see the opening of its Sihanoukville branch office, which is to be followed by a further branch in Battambang scheduled to open before the end of the year.
Beginning next month, customers of the bank will be able to borrow up to 60 percent of the purchase price of their home and spread the repayments over a period of up to 15 years.
This, according to its Chief Executive, Dean Cleland, will bring home ownership to those that could only have dreamt about it before.
"When we opened our doors in September last year we did so with the promise that we would bring new and innovative products and solutions to the market," Cleland said. "By launching a range of home loan products with an ability to spread repayments over a term of up to 15 years we believe we are keeping to our promises."
Other banks operating in Cambodia do provide home loans but they are either tied to in-house property developments or are of a short tenor and have to be repaid over a much quicker period, making repayments often unaffordable. With initial interest rates set at 9.9 percent per annum variable rate, ANZ Royal aims to expand options for buying a home.
The bank's criteria stipulate that borrowers must have been in continuous employment for a period of two years and that repayments do not exceed more than 35 percent of their monthly gross salary. Land must be registered by the local Cadastral Office, responsible for issuing registered land certificates. The bank will not lend against unregistered properties.
Cleland concedes that the lack of registered land titles in Cambodia will hamper the efforts to provide home loan mortgages.
"We have little choice, since the land title is the only document which provides proof of ownership and this is a must if we are to safely lend into this market," he said "That said, the number of registered land titles is growing daily and there's nothing to stop sellers applying for a land certificate at any time to help them sell their home to an ANZ Royal customer."
The bank currently pays 4 percent interest on a 12-month term deposit. The bank says its interest rates are linked to US Federal Reserve rates (currently 5 percent for overnight cash). Cleland says this means interest rates can go up as well as down - something his front-line sales staff will be required to communicate to applicants.
"As a responsible bank with an international parent [ANZ Banking Group] we have no wish to find ourselves with the unenviable task of having to sell someone's home because they are unable to afford to make repayments," he said. "For this reason we are at pains to make sure that an increase in global interest rates isn't going to cause too much discomfort to our borrowers."
The availability of long-term mortgages could well give an added boost to what is already viewed by some as an overheating housing market. But Cleland disagrees.
"By spreading home ownership across a much wider market we believe that this is likely to bring more realistic and sustainable values to the housing market. At present home ownership is restricted to a very few wealthy Cambodians - we're simply giving everyone else an opportunity to build a stake in their future too."
ANZ Royal Bank is 55 percent owned by ANZ Banking Group and 45 percent by the well known locally incorporated Royal Group headed by Okhna Kith Meng.
The bank has four branches in Phnom Penh and two in Siem Reap. Next month will see the opening of its Sihanoukville branch office, which is to be followed by a further branch in Battambang scheduled to open before the end of the year.
1 comment:
What is the fuck? Cambodia has home mortgage program? If AH HUN SEN kept bulldozer those poor Cambodian people home and how the fuck these Cambodian people can get the so called home mortgage?
Cambodian people work for $1 dollar aday and if they can't pay their home mortgage and their house will be taken over by the bank and the bank will kick the people out the house and sell the house to a new customer!
AH HUN SEN kicked poor Cambodian people by using bulldozers from their house and the bank can kick poor Cambodian people from their house by using money!
Does anybody see anything different here? I don't see anything different here! AH HUN SEN and the Banker still get what they want and poor Cambodian people are still the victim!ahahaha
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