Competition, interbank interest rates and a stable exchange rate are the reasons for the growth of the housing loan portfolio in the first quarter of 2016.
An article on Elfinancierocr.com reports that "... Housing credit has been growing at safe rate since the start of 2016 and this market is expected to remain this way for the rest of the year ... In the first quarter, the total balance of housing loans in the financial system reached ¢4.7 billion, an increase of 10.9% compared to the same period in 2015. "
The portfolio of mortgage loans at the end of 2014 exceeded $11 billion, with the categories of social interest loans and homeownership loans recording the highest growth rates.
Credit for housing increased by $1,142 million compared to 2013, followed by the commercial sector, where $195 million more was invested than in the previous year, according to the Superintendency of Banks in Panama (SBP). At the end of 2014 mortgages "... represented 7% of the 4 million active references which reside in the database of the Panamanian Credit Association (APC)."
Although equivalent to 85% of GDP, analysts say the portfolio of bank loans to the private sector is at healthy levels and can grow further.
At the end of 2014 bank lending to businesses and households in the country amounted to $46,212.6 million, well above the amount of public sector debt, which closed in 2014 at an amount equivalent to 39.4% of gross domestic product (GDP).
The recently approved amendment to the Housing Act provides a subsidy of 2.5% in the interest rate for mortgage loans that are not greater than $32,000.
Responding to industry demands and seeking to motivate the new housing market, the recently approved reform also provides, as well as the subsidy, that any bank can apply the exemption of 15% from Value Added Tax (VAT) for mortgage loans with this same ceiling rate.
In order to facilitate access to inventory credit for SMEs plans are underway to reform the Law flexibilizing on chattel mortgages.
From a press release by the Ministry of Economic Affairs and Competitiveness:
"The Cabinet Council has approved a bill that promotes access to credit and modernizes the system of mortgage deposits and has authorized the Minister of Trade and Industry, by Resolution of Cabinet, to present the initiative before the National Assembly.
At the Banco de Costa Rica the volume of assets received in lie of payment increased by 70% compared to 2011.
A survey by Elfinancierocr.com between 6 financial institutions, including the four public banks in the country, revealed that in February of this year, there were 1259 properties in their possession, in contrast to the 884 properties that were reported in the same period 2012, ie there was a 42% increase.
In January 2012, there were 202,000 active mortgages, which is an increase of 4.2% compared to 2011.
Figures from the Panamanian Credit Association (CPA) show that in January 2012, there were 202,000 active mortgage loans, representing an increase of 4.2% compared to the figures for the same period in 2011.
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.
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