On September 24 and 25 construction companies and the real estate sector will meet to discuss the economic, political and institutional factors that are hinder the housing development in the country.
One of the topics at the event organized by the Central Housing Association (ACENVI) is the way to solve the problem of future housing deficit in the country, which now exceeds a million and a half homes.
Although during the first six months of 2013 building permits decreased by 18% compared to 2012, residential investment grew by 27%.
The town of Juan Diaz had the strongest growth with 24% of total investments in the district of Panama. Standing out the most in this area was the construction of houses, apartment buildings, businesses and other things.
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 Costa Rican Congress is looking at a law for funding homes valued at less than $150 thousand, for families whose incomes are not above $4000.
This plan "... seeks to provide a housing solution through loans to be granted by public banking entities, mutuals and private banks to enable people to get credit and buy a plot of land, a house or to build on their own lot," noted an article in Elfinancierocr.com.
Costa Rica's Congress has approved a bill that seeks to exempt deposits used to finance long term housing loans from requiring a minimum legal reserved amount.
From a press release by the Legislative Assembly of Costa Rica:
The plenary legislature passed on its second and final debate with the support of 23 MPs bill number 17809, addition to Law No. 7558, the Law on the Central Bank of Costa Rica, to exempt from requiring minimum reserve amounts, deposits and revenues used to finance long term housing loans .
The National Assembly has given the final approval to increase ceiling rate for preferential interest to $120,000, which will have a direct impact on the housing market.
The plenary of the legislature approved on third reading bill no. 241, by which the ceiling for preferential interest rates has been increased to $120,000 reported Capital.com.pa.
"The incentives that have been updated by the Act are: Preferential Interest, increasing the lower limit from $30,000 to $35,000, homes valued up to $35,000 will receive a subsidy which covers the entire interests to the corresponding market, and similarly increases the upper limit from $80,000 to $120,000, where homes will receive a subsidy of up to two percentage points (2%) from the market rate," said the Minister of Economy and Finance, Frank De Lima.
A joint housing project between a bank and the Chamber of Construction will be carried out in Tegucigalpa, Honduras.
The president of the National Agricultural Development Bank (Banadesa), Johnny Handal, and vice president of the Honduran Chamber of Construction Industry (Chico), Oscar Calona signed off on a program for building popular housing.
The project will benefit families earning less than four minimum wages, and will start with almost a thousand houses in Tegucigalpa, which are to be financed with funds that will be raised by Banadesa’s Private Contributions Regime (PAR), the newspaper La Tribuna reported on its website.
President Martinelli announced that the maximum value for a property to be considered for the preferential interest rate will be increased to $120,000.
The measure must be passed in the National Assembly by amending the act, which is expected to happened very quickly.
A current limit of $80,000 has been established as the maximum value of homes that can be financed under the law, which allegedly has led to low-quality housing solutions being built to keep costs within that range.
Proposals submitted by the Costa Rican government are awaiting approval by Congress.
Two bills intended to stimulate the middle-class housing market were presented over a year ago and have still not received approval from the Costa Rican legislators.
Among the proposals that have not progressed is one that refers to a five-year exemption from paying property tax for homes valued under $145,000 in the 48 months following the law’s inception.
They were built to be sold using government subsidies, but an increase in the cost of building materials has pushed their real price above the limit established by the law.
The Government is maintaining its position of not raising the price ceiling of $20 000, stating that this would not benefit poor families, but recognizes that it must find a solution to the problem.
In Costa Rica, this niche market was hit hardest by the U.S. housing crisis.
According to the Costa Rican Chamber of Construction the outlook is not encouraging and they do no foresee recovery in the short term.
Jose Alfredo Sanchez, vice president of the group, said "In Costa Rica, there has been a dramatic effect on the coast, where (project development) has not recovered in the short term because this would require strong economic growth in the U.S., which is not happening. "
BCIE and IDB funds will finance the "Casa para Todos" (Housing for Everyone) program.
The $ 70 million Inter-American Development Bank loan will go to build 6.373 homes for low-income families, of which 2.000 would be ready by March 2011.
The credit of the Central American Bank for Economic Integration (BCIE), of also $ 70 million, "will be implemented by the National Housing Fund (FONAVIPO), which will bid the affordable housing projects to developers," Elsalvador.com reported.
El Salvador’s government signs agreements with commercial banks to obtain short-term finance for the social housing project.
Tomás Chévez, president of the Social Home Fund (FSV), commented that the agreements had been signed with Banco Agrícola and HSBC.
Without revealing the size of the loans, he added that the funds from Banco Agrícola will go towards five housing projects while the HSBC loan will fund two.