Up to June banks had only provided financing for housing projects worth $14.36 million, while in the same period last year it had already reached $32 million.
"The new housing projects can be counted on the fingers of one hand," said the executive director of the Salvadoran Chamber of Construction Industry (Casalco), Ismael Nolasco, adding that the drop is a reflection of an industry that is not investing in large housing projects because it has seen any demand.
Projections for growth in 2013 are less than 1.4%, a figure which will not be reached if there is not a greater implementation of public and private works.
According to the Salvadoran Chamber of the Construction Industry (Casalco), one of the indicators which reveals the behavior of the sector "is the apparent cement consumption, which between April last year and the same month of 2013 went from 9.6 million to 9.0 million bags, registering a drop of 7%," noted an article in Elsalvador.com.
Businessmen from various sectors are demanding regulation by the government of several existing laws, which allow for different interpretations and legal uncertainty.
Elmundo.com.sv reports that "representatives of the Salvadoran Association of Industrialists (ASI), the Salvadoran Chamber of Construction (Casalco) and the Corporation of Exporters of El Salvador (Coexport), said that the lack of regulations or breach of these in many laws intended to raise productivity, is generate the opposite effect from the original objective. "
After its ratification in El Salvador, the Regional Mortgage treaty still needs to be approved in one more country to come into force.
Salvadoran entrepreneurs welcomed the legislative ratification of the Treaty on Free Movement of Goods and Services, known as the ‘hipoteca centroamericana’ or Central American mortgage.
In order for the agreement to become effective, it requires ratification by three states."In 2010 Guatemala did so, this Thursday just past, it was El Salvador, and it is expected that soon Honduras or Costa Rica will also endorse the document. In Costa Rica they have already introduced a bill in the National Assembly for ratification," reported Elmundo.com.sv.
The government of El Salvador is still facing problems with the Maternity Hospital. Although it may be third time lucky for the Boulevard Diego de Holguín Tender ($ 30 million) , the conditions of the tender have been found to be inadequate.
On this occasion, it was hoped that the process would end in success, because so far there had been no negative comments about it, as explained by representatives of the Salvadoran Chamber of Construction (CASALCO).
Since 2008, more people have applied for loans to buy pre-owned homes than for new ones.
According to data from El Salvador's Social Housing Fund (FSV), in 2006 of 1,520 registered loans, 1,169 were for a new home. In 2008 the trend changed with more mortgage applications for pre-owned houses.
Faced with restrictions on local credit availability, 10 projects are looking to foreign banks for finance.
Mario Rivera, president of the Salvadoran Construction Chamber (Casalco), commented that it is not yet possible to access credits from the guarantee fund set up through a trust by the Multisectorial Bank of Investments (BMI).
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