An announcement has been made in Guatemala for a housing subsidy program for public officials, and mortgage credit lines for private employees.
Prensalibre.com reports that Alejandro Sinibaldi, Minister of Communications, Infrastructure and Housing (CIV in Spanish), advertised the program, after having opened the sixth edition of the Housing Fair Expocasa, organized every year by the Guatemalan Construction Chamber (CGC).
In recent months the interest rates for new home purchases have declined from an average of 13.02% to 12.23%.
Banking institutions have added new options to their loan portfolios, such as funding for improvements and to buy a used house.
"Oscar Sequeira, coordinator of Statistics at the Construction Chamber of Guatemala (CGC), said that interest rates are down worldwide due to policies pursued by central banks and that has had an impact on reducing the level of fees charged for housing finance", reported Elperiodico.com.gt.
Some of the causes mentioned are the low implementation of works by the State and municipalities, reluctance to invest remittances and fiscal reforms that discourage investment.
An article in Prensalibre.com reports that Oscar Sequeira, president of the Statistical Commission of the Guatemalan Chamber of Construction (CGC), said "The new administration generated positive expectations which led to dynamism in the sector, but as time passed by it has gone down, especially after the tax reform."
During the inauguration of " Expo Casa" President Perez Molina announced the provision of 18,000 housing subsidies and another 6,000 for the "piso seguro" (safe floors) project.
The current housing deficit in Guatemala is estimated at 1.7 million, and the plan is to resolve this by Government led construction of houses using the Guatemalan Housing Fund (FOGUAVI), which has a budget of about $58 million a year for real estate projects.
In Guatemala, where the housing deficit is 1.5 million units, they only manage to produce between 20,000 and 50,000 homes a year, a situation that is forcing authorities and the private sector to find solutions.
The minister of Communications, Infrastructure and Housing (VIC), Alejandro Sinibaldi, told Lahora.com.gt that at present, the housing deficit in Guatemala is 1.5 million units.
The deficit between supply and demand for housing solutions is growing every year, requiring state policies for the creation of credit systems for low-income sectors.
In Guatemala, the demand for housing grows between 55,000 and 60,000 units every year, but only 20,000 new houses are built, calculates the Guatemalan Chamber of Construction (CGC).
Employers in the construction industry forecast a 4% growth in 2012
The Chamber of Construction in Guatemala noted that this year they expect industry growth of 4%, the beginning of the revival of that sector.
The president of the Chamber of Construction, Jorge Montenegro, recognizes that the market after a slump of several years, is finally seeing an improvement. "Something that has helped is that remittances are growing and one of their main uses is to build housing," said the business leader according to Siglo21.com.gt.
Materials and other inputs saw rises of 25 percent in 2011, with a quintal of iron having the highest price increase.
Construction materials experienced a 25.6 percent increase last year, compared to prices in 2010. A quintal of iron was the item with the most notable rise, going from Q337.7 ($ 43) in 2010 to Q423.58 ($ 54) in 2011, reported PrensaLibre.com.
The Chamber of Construction Companies is urging the Government to create a new financing model for home purchases.
Employers propose that the government subsidize up to four interest rate percentage points for the purchase of homes under $38,000 and up to two points for homes between $38,000 and $51,000. Current interest rates fluctuate between 7.5% and 9%.
Prices of materials such as iron rods and cement, among other things, have gone up compared to 2010.
The rise in the price of oil and other raw materials at international level is one of the main reasons for the sharp increase observed in the prices of building materials in Guatemala.
Guatemala City offers great opportunities for vertical housing development.
The high price of family housing, the lack of extensive land in the capital or on the outskirts of the city, are some of the motives behind the construction of apartment complexes.
From now until June 5, 2011 Expocasa is taking place in Parque de la Industria..
During the fair, real estate developers expect to finalize the sale of some 450 homes.
"Jorge Montenegro, president of the Guatemalan Chamber of Construction (CGC), explained that the purpose of the fair is to stimulate and boost the housing sector by offering historical interest rates for housing loans." reported an article in cnn.com.gt
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