Less Profits in Real Estate Business

The prices of construction materials in Nicaragua have reported increases in recent months, but because of the crisis in which the country finds itself, businessmen have chosen to assume these costs and not pass them on to customers.

Monday, August 26, 2019

According to reports from the Central Bank of Nicaragua, the Construction Materials Price Index (CPI) up to May 2019 reported a 7.6% year-on-year growth with respect to the same month of the previous year.

Despite this increase in construction costs, businessmen have chosen not to transfer them to the final price, since the country's economy is in recession, resulting from the political crisis that erupted in April 2018.

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Darling Cruz, representative of the residential project Cumbres de Cedro Galán, explained to Elnuevodiario.com.ni that the increase in costs "... they have not wanted to apply it to the client, because of the significant drop in sales in recent months since the socio-political crisis."

Cruz added that "... We are assuming those costs in order not to lose the opportunity to sell the houses, if we start to raise it, as it is now, with all the increases, we will not be able to sell, the final cost of the houses has not been moved, rather we have lowered the price.

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More on this topic

Real Estate Market in Crisis

August 2019

Although some office buildings report acceptable levels of occupancy, since the crisis began in April last year, rental prices in Nicaragua have fallen by up to 35%, and no improvements are envisioned in the short term.

Businessmen dedicated to the rent of real estate assure that in this scenario of political and economic crisis, they have had to diminish costs to give facilities to the clients and thus to stimulate the contracts.

Construction: Prices up to February 2019

April 2019

The costs of wood and roofs, and metals and derivatives, explained during the second month of the year the 10% year-on-year increase in the prices of construction materials in Nicaragua.

The statistics of the Price Index of Construction Materials (IPMC) corresponding to February 2019, indicate that the IPMC registered a 9.6% year-on-year growth regarding the same month of the previous year, variation greater than the 8.4% reported in February 2018, informed the Central Bank of Nicaragua (BCN).

Crisis Keeps Shocking Real Estate Sector

January 2019

Because of the difficult political and economic situation that Nicaragua is going through, it is estimated that with respect to 2017, sales in Managua declined more than 50% during 2018.

According to the firm Keller Williams (KW Nicaragua), which brings together nearly 200 real estate agents throughout the country, sales have fallen because of uncertainty in the country, coupled with job losses in the local economy.

Building Materials: Prices up to October 2018

December 2018

In Nicaragua, the Building Materials Price Index recorded an increase of almost 10% during October compared to the same month in 2017.

The Central Bank of Nicaragua (BCN) reported that the Building Materials Price Index (CPI) registered a 9.9 percent year-on-year growth compared to October of the previous year (8.8% registered in September 2018 and 3.7% in October 2017).

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