With the proposed regulatory framework for Public-Private Partnerships in Panama, construction businessmen hope to ensure that the projects conclude with the required parameters and that the processes are transparent.
President Cortizo announced the implementation of a plan that contemplates expanding the preferential interest rate for homes with prices of up to $180,000.
During his inauguration, Laurentino Cortizo announced that he will implement a plan to reactivate the construction industry, which includes the extension of the preferential interest in different ranges for housing up to $180,000, the presentation of a real estate leasing bill and exemption from transfer tax for the current inventory of housing, among other actions.
In Panama, the elected government will have among its main challenges to facilitate the necessary conditions for the reactivation of construction in the country, which has reported negative figures for the last two years.
Since the beginning of 2017 investments in construction in the country have decreased and the situation does not seem to improve. Data from the Office of the General Comptroller of the Republic detail that the performance of the construction sector in 2018 was negative, as the cost of new construction, additions and repairs totaled $1,311 million, a figure 39% lower than the $2,144 million reported in 2017.
For businessmen in the sector in Panama, the rules and regulations that currently apply to the import of cement into the country have lagged behind.
According to the Chamber of Construction (Capac), cement is not the only material that should be regulated, since the rest of the main construction inputs that are marketed and used in industry should also be regulated.
Expanding to $150.000 the range of homes with preferential interest and guaranteeing real estate leasing are two of the changes that could boost a recovery of activity in Panama.
Construction in the country has reported a downward trend in recent years, however, representatives of the Panamanian Chamber of Construction (CAPAC) expect that with the arrival of a new government and the start of major works such as Metro lines 4 and 5, the sector may re-emerge.
In the upcoming edition of CAPAC Expo Habitat, to be held from September 5 to 9, the real estate developers' union expects that $120 million worth of deals will be struck.
Theevent will be held at the ATLAPA Convection Center, and will include the participation of more than 400 exhibitors, among them construction, real estate and decorating companies. About 600 projects for houses, apartments and land located in different areas of the country will be exhibited.
To end the strike that has now been going on for almost a month, the Panamanian construction union suggested to the workers' union that the disagreement be resolved through arbitration.
With two days to go before the strike enters its second month, and in view of the inability to reach an agreement, the Panamanian Chamber of Construction proposed to the Single Trade Union of Construction and Similar Workers (Suntracs) to arbitrate in order to resolve the conflict.
In Panama, the workers' union is still opposed to the salary increase proposal put forward by employers, and it is keeping in place the construction work strike, now in its 14th day.
The country that has been leading construction activity in Central America over the last few years, has seen work on 260 constructionprojects nationwide paralysed for almost two weeks.
Unions and business leaders are still in negotiations to end the strike that has been going on since last Wednesday, affecting all construction projects in the country, including the expansion of Tocumen and Metro Line 2.
The workstoppage has affected almost 100% of the works under construction in the country, from private projects to other state run projects, such as the expansion of the Panama City airport and expansion of the Metro.
The Panamanian Construction Association is planning mortgage transactions of $120 million at the Housing Expo, which will be held from April 12 to 15 at the Atlapa Convention Center.
The Panamanian Chamber of Construction (Capac) reported that in the "... sixteenth version of the Housing Expo 2018, 200 exhibitors will take part which includes developers and real estate companies with more than 400 projects within the social interest, ranging from social interest to high cost projects."
Obtaining precise and reliable figures to make better projections is the objective of the new economic council created by the builders' union.
The Economic Advisory Council for Construction (COCEC) is a new body of the builders' union that will seek to specify data such as volumes of square meters built, housing programs, commercial, industrial, road, land use, public investments and indicators of economic terms and productivity.
Greater mobility provided by Line 2 of the Metro in the East of the capital explains the growing attractiveness of the area for real estate development, especially for residential construction.
As of October 2013, the total amount of area processed for new residential buildings in the province of Panama amounted to 903,000 square meters, while in the same month in 2017, just four years later, the figure exceeds one and a half million square meters.
By the end of 2016, the bank loan portfolio for housing and commercial construction exceeded $14.7 billion, and more than 19,000 houses and 545 buildings were built in Panama in the last six years.
A combination of low interest rates coupled with a growing and stable real estate supply account for much of the growth in real estate and construction activities in Panama.
The amount of transactions projected to be made at Expo Habitat 2017 is $120 million, an event which will be held from September 13 to 17 in Panama City.
Within the framework of the housing and construction fair, where more than 600 real estate projects will be exhibited, a business conference will be held involving companies in the sector, in which it is expected that at least $20 million worth of to businesses deals will be closed.
An increase in the cost of construction permits, new rates for services from public entities and a more expensive labor force explain a large part of the increase in real estate sales prices.
The guild of construction companies in Panama states that prices for homes, shops and apartments are so high that in many cases buyers can not afford them.The increase, they say, is not due to increases in the cost of construction materials, but to an increase in the cost of paperwork, such as building permits, higher interest rates for loans and the elimination of some subsidies.
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