One million square meters are awaiting construction permits in a country where 13 institutions have to be visited in order to collect a license.
For the Municipality of Guatemala to give out a building permit, the applicant must obtain approval from the Ministries of Environment, Culture and Sports, the General Property Registry, the Directorate General of Civil Aviation, the National Forestry Institute, the National Coordinator for Disaster Reduction, the Office for Territorial Control and the district capital departments of Works, Historic Center, Environment and Land and from the Empagua.
The union expects year-end residential construction will grow by 3.5%, below the 3.8% projected by the Bank of Guatemala.
The residential construction sector remains low but with stable growth, driven by the construction of high rise housing in urban areas, particularly in urban areas, a zone that professionals and young families belonging to medium-high socioeconomic level favor because it is closer to the city.
The sector grew by 5.8% in the first half of the year, it has seen eight consecutive semesters with positive growth rates.
Business people in the sector believe that the political crisis did not have any negative effects on the sector, which managed to register growth of 5.8% in the first half of the year. The same view is taken of the tax on cement that was declared unconstitutional in August but was charged up until July.
Driven by lower oil prices and uncertainty which has reigned in the country in recent months, prices of steel products for construction recorded declines of between 15% and 30%.
The construction sector attributed the decline mainly to the drop in oil prices, to which the behavior of global steel is closely related. On top of this is the negative effect of the political crisis in the country which although did not stop the advance of the economy, generated uncertainty about the speed with which the problem would be solved in the future.
From September 29th to October 1st, entrepreneurs will be gathering together in Guatemala City to take part in business conferences and address issues such as use of technology and construction practices.
The event is being organized by the Guatemalan Chamber of Construction (CGC) and the Guatemala Green Building Council (GGBC).
Pelayo Llarena Cobos, CGC president, told Revistaconstruir.com that "...
The private sector claims that excessive paperwork and the lack of technical personnel in the Ministry of Environment is delaying the assessment of environmental impact studies and the granting of building permits.
According to the Guatemalan Chamber of Construction, the slowness with which the studies are evaluated and permits granted to construction companies is preventing projects being carried out in the medium-term and moving towards recovery of the sector.
Most of the premium housing supply is located in the Eastern region of the metropolitan area, where spaces are offered measuring approximately 200 square meters and are priced from $150,000 upwards.
The Guatemalan Chamber of Construction (CGC) states that "... the market for premium housing in the country hovers around 15%," where the alternative to luxury apartments shows an upward trend.
The total number of square meters of construction sites authorized in the first nine months of the year in the municipalities of the metropolitan area increased by 8.9% compared to the same period in 2013.
From January to September of this year authorization was given for the construction of 1.6 million square meters of buildings, similar to that reported in 2013 which was for 1.8 million square meters, in other words, it is expected that by the end of 2014 an increase in the amount of construction will be reported.
The Ministry of Environment and Natural Resources in Guatemala is one of the institutions that is holding up construction projects by issuing licenses up to two years late.
At the moment the process of obtaining a license takes from 6 months to 2 years, depending on the size of the project. This has been the subject of discussions aimed at achieving reform in order to counter this problem.
The increasing preference for residences in central areas of the capital is generating business opportunities for developers in areas which have not yet been exploited.
Real Estate companies say that although there is a good distribution of the supply of high rise and traditional houses in the capital, "... development is needed of zones 3, 6, 7, 8, 9 and 12, which have access and services."
The monetary authority has endorsed the issuance of $447 million in Treasury bonds, which will be used to settle debts with private contractors.
José Luis Agüero, president of the Guatemalan Chamber of Construction (CGC) believes that this is an important step to be able to honor the debt, and if Congress goes on to approve the issuance, they will become resources that will revive the economy.
The president of the Bank of Guatemala, Edgar Barquin warned that "In a decade, the debt level will be critical."
Guatemala's foreign debt currently amounts to 25% of gross domestic product (GDP), and it appears to be far from the critical point, which is indicated by 40% of GDP.
However Barquín explains that the problem is in the low payment capacity of the Guatemalan state, which could be compromised in terms of the maintaining a fiscal deficit at a reasonable level.
From 18 to 21 April, the eleventh construction exhibition will take place in Guatemala receiving national and foreign entrepreneurs who are seeking new investments and businesses.
According to Amanda Vega, business manager at the Guatemalan Chamber of Construction (CGC), they expect the participation of 150 national and international exhibitors, from the U.S., Spain, Korea and Central America, among other places.
The Bank of Guatemala's growth forecast of 7.7% has been adjusted to 5.9%, while the Guatemalan Chamber of Construction forecasts 2.9%.
Edgar Barquin, president of the Bank of Guatemala (Banguat), explained that this decision was made based on surveys which reflect employers' decisions about investing, as well as budget execution data, projections and plans by the Government, entry of foreign investment, authorized licenses for construction granted by municipalities, and building spaces.
The Chambers of Commerce and Agriculture submitted to the 4th Constitutional Court challenges against fifteen articles of the Tax Update Law.
These challenges are in addition to those presented last week by the Association of Coffee Exporters, and which will be submitted today, January 25, by the Guatemalan Chamber of Construction, the National Association of Home Builders and Contractors' Guild.