Every year the demand for housing in Nicaragua grows by 15,000 families, but only 10,000 new housing solutions are built.
In Nicaragua, some 25,000 houses are needed annually to meet increasing demand, which increases by 15,000 families each year.
Over the last two years, the annual deficit has fluctuated between 5,000 and 15,000 homes according to business owners in the construction sector, while the accumulated historic deficit is about 700,000 housing units.
The changes in criteria as to what is consider social housing has contributed to the development of the sector.
The state subsidy, the increase in the ceiling of $ 10 thousand to $ 20 thousand for housing to be considered of social interest and the fact the Nicaraguan Institute of Social Security (INSS) made funds available for banks were factors which led to a recovery in the industry," said Alfonso Silva, vice president of the Nicaragua House Builders (Cadur).
The private sector expects to build between 5.000 and 7.000 social housing units, with prices between $12.000 to $15.000.
Constructors are expecting an increase of 40% when compared with 2008, as a result of the coming into effect of a law fostering social housing and millionaire disbursements to banks by the Social Insurance System.
"We are optimistic about the coming into effect of the law, as it covers one of our two concerns.
The Banking Superintendence issued a ruling ordering that starting January credit that is greater than 40% of the salary of the person requesting the loan should not be granted.
This is applicable to requests for financing for housing or consumption, confirmed the head of the entity, Victor Urcuyo.
The measure, according to the president of the Chamber of Developers (Cadur), is threatening to sink developers even more, as they are facing collapse due to the increase in interest rates.
Banks will raise the interest rate for housing loans by one point. Currently the rates are at 9.5% (fixed rate) and 10.5% (variable rate).
The President of the Chamber of Urban Developers of Nicaragua, Alfonso Silva, said that the country's interest rates for housing is the highest in the region, not to mention having the lowest financing offers. Panama ha the best interest rate; by law it provides a subsidy which allows the rate to fluctuate between 0.75% and 4.25% and house that cost from $12,000 up to $60,000. This way both low-income and middle-class housing can benefit.