Between July and October 2020, the number of people in El Salvador exploring mortgage options online increased by 18%, and the number of Costa Rican consumers looking to buy credit cards decreased by 60%.
CentralAmericaData's interactive platform Consumer Insights monitors in real time the changes in consumer habits in all markets in the region and in other Latin American countries, with fundamental information to understand their behavior, new trends and anticipate eventual changes in their purchase patterns.
Without clarifying which companies or individuals could apply the measure, the Bukele administration announced a three-month exemption from payment of mortgage loans, services such as water, electricity, Internet, cable and telephone.
These measures may be applied by all those "... natural and legal persons, which are directly affected by the covid-19 pandemic and government institutions must ensure that in their implementation there is no abuse or exploitation". As a result of this announcement, uncertainty has arisen as it is not clear how those "directly affected" will be determined.
The builders' guild in El Salvador is preparing a law proposal, which provides for the approval of preferential interest rates on loans for home purchases.
The proposal to be presented by the Salvadoran Chamber of Construction Industry (CASALCO) will be applicable for bank loans to low- and middle-income families who purchase their first home.
The Social Housing Fund wants to revive the housing market by reducing interest rates for the purchase of new or used homes by 5.5%.
In the case of loans to public institutions for the purchase of new houses, the rates will drop from 6.05% to 5.50%, while for private loans for new houses, the rate will be reduced from 8.5% to 8 % for amounts ranging between $31,000 and $125,000.
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.
The Social Housing Fund (Fondo Social para la Vivienda) in El Salvador will keep the interest rate for social housing construction at 6%.
Francisco Guevara, president of the Social Housing Fund (FSV by its initials in Spanish), explained that this was because the housing supply was less than expected due to red tape delays.
"Some housing projects suffered from lack of technical documents which were in the process of being drawn up, or awaiting inscription in the National Registry. This halted three projects", said Guevara.
The Social Housing Fund plans to provide $46 million in for housing construction, and another $44 million for purchasing a used house.
According to an article in Elmundo.com.sv this year, the Social Housing Fund (FSV) "expects to increase lending both for new and used housing. In addition, it will reinforce credit for Salvadorans abroad and other lines of financing they offer. "
Salvadoran banks want restrictions to be eliminated so that all financial institutions can share and have access to positive or negative credit histories of their customers.
Elsalvador.com reports that "The Credit Bureaus Act provides in Article 14 that the credit history of customers or consumers can only be supplied to operators with their 'express written consent'."
With the exception of El Salvador, bank lending is growing in Central American countries, strengthening in the years following the crisis and reaching double-digit growth in real terms.
From a report by Fitch Ratings:
Accelerating Growth: Central American bank lending has strengthened these countries in the years following the crisis, reaching double digit growth, even in real terms, with the exception of the Salvadoran banking system.
In order to address issues related to urban development and housing finance, a meeting will take place of bankers, developers and city officials, from 3 to 5 December, in Lima, Peru.
A statement of the Guatemalan Chamber of Construction reads:
The Inter-American Housing Union (UNIAPRAVI) in conjunction with the Ministry of Housing, Construction and Sanitation of Peru the fund MIVIVIENDA SA and the Peruvian Chamber of Construction will hold in the city of Lima, Peru, from 3 to 5 December 2012 the III Inter-City Forum on Housing Finance.
The Social Housing Fund of El Salvador has raised the maximum amount for loans to $ 125,000, following a request of the Salvadoran Chamber of Construction.
It has also announced the unification of the rates for loans for the purchase of affordable housing which will remain at 6%.
The measure had been formally requested of the Social
Housing Fund (FSV in Spanish) by the Salvadoran Chamber of Construction (CASALCO), as well as expanding the scope of social action in terms of housing provision, serving to stimulate demand in the construction sector.
From a press release from the Social Fund for Housing (FSV in Spanish):
FSV PRESENTS ITS ACCOUNTABILITY REPORT FOR JUNE 2011 TO MAY 2012.
The Social Housing Fund (FSV) has presented in open court its Accountability Report which reports on the results obtained by the institution between June 2011 May 2012 in granting loans to families, civil society organizations and government entities.
In February credit for the construction sector reported a growth of 38.22%.
According to the Salvadoran Chamber for the Construction Industry (Casalco), the industry obtained between the months of January and February about $79 million in loans to build and buy homes, representing an increase of 38.22% compared to the same period in 2011.
"Funding for construction totaled $23.07 million, 5.94% more than last year.
The Legislative has ratified a Treaty for the Establishment and Implementation of Central American Mortgages signed between Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama and the Dominican Republic.
From a press release from the Legislative Assembly of El Salvador:
The Legislative Assembly has ratified with 71 votes, the Treaty for the Establishment and Implementation of Central American Mortgages signed between the Republics of Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica, Panama and the Dominican Republic.
Employers have suggested that the Social Housing Department raise the ceiling for lending to $125,000, in order to create opportunities for lower-income segments.
The Salvadoran Chamber of the Construction Industry (Casalco) has proposed that the Social Housing Fund (FSV) increases to $125,000 its lending ceiling, seeing as it is now being analyzed, reported Elmundo.com.sv.