Housing Credit Down 55% In El Salvador

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.  

Monday, September 2, 2013

"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.

Currently "there is no intensity in construction," said Nolasco. "Not that there is no need to build more houses. The housing shortage in the country, of 44,000 homes, reflects Salvadorans need to have a decent home. The problem is in with credit," noted an article in Elsalvador.com.

According to the official, "private sector (builders) have to be sensible" because if you build a housing project you must be sure that you will recover your investment and that certainty is not being felt in the country. While Salvadoran banks have increased mortgage loans by 7% , "more than 50% of the population doesn't have any possibility of getting a mortgage," said Nolasco.



More on this topic

Builders Wary of Interest Rate Hike

September 2012

In light of rumors over possible changes to mortgage conditions, Nicaraguan real estate developers are asking the country's banks not to go through with them because they would affect the sector’s growth.

Alberto Atha, president of the Chamber of Builders of Nicaragua (Cadur), said that a rumor is spreading that some banks will increase interest rates on mortgage loans by between one and two percentage points and the premium could be increased by 15 %. "We are convinced that such a move would affect and stagnate the growth process that the industry is experiencing." ... although the changes are not yet official, they are holding talks with banks asking for these measures not to be applied in the immediate future. "

Salvadoran Banking Loan Less for Construction

January 2012

Financial institutions lent 15% less for building houses in 2011, complained the Chamber of Construction.

The Salvadoran Chamber of Construction Industry (Casalco) reported that the portfolio of loans for housing construction experienced a decrease of 15% in 2011, as banks only granted $113.9 million.

Salvadorans Demand More Used Housing than New

September 2010

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.

El Salvador: Construction After Banking Flexibility

April 2009

In the absence financing solutions, the construction union sector initiated meetings with private banks.

The Salvadoran Construction Industry Chamber (CASALCO) is not seeking massive loans, but more flexibility in granting credit.

La Prensa Grafica published on its website: According to Nolasco, the hope is to find new funding mechanisms in private banking, as well as to know what the requirements are to gain access to resources. Earlier this year, several construction companies went to the the Multisectoral Investment Bank (BMI) to look for financing mechanisms that would allow the development of 11 housing projects that needed an investment of $70.1 million, of which $31 million was expected to be obtained from the second-tier bank."

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