Financing for housing and sustainable urban development will be the topics under discussion at the event to be held on August 22 and 23 in Managua.
The Chamber of Builders in Nicaragua and the Inter-American Housing Union are organizing the event, which will bring together professional financial real estate companies, developers and builders, banks and finance companies, savings and loans companies for housing, cooperatives, investors, and representatives of public entities.
The Social Housing Fund wants to revive the housing market by reducing interest rates for the purchase of new or used homes by 5.5%.
In the case of loans to public institutions for the purchase of new houses, the rates will drop from 6.05% to 5.50%, while for private loans for new houses, the rate will be reduced from 8.5% to 8 % for amounts ranging between $31,000 and $125,000.
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 Social Housing Fund (Fondo Social para la Vivienda) in El Salvador will keep the interest rate for social housing construction at 6%.
Francisco Guevara, president of the Social Housing Fund (FSV by its initials in Spanish), explained that this was because the housing supply was less than expected due to red tape delays.
"Some housing projects suffered from lack of technical documents which were in the process of being drawn up, or awaiting inscription in the National Registry. This halted three projects", said Guevara.
From a press release from the Social Fund for Housing (FSV in Spanish):
FSV PRESENTS ITS ACCOUNTABILITY REPORT FOR JUNE 2011 TO MAY 2012.
The Social Housing Fund (FSV) has presented in open court its Accountability Report which reports on the results obtained by the institution between June 2011 May 2012 in granting loans to families, civil society organizations and government entities.
In a clear demonstration of the return of confidence in the banking sector in January 2012, construction loans increased four fold compared to January 2011.
Two reasons behind the increase in lending: the 8% growth of the industry in 2011 and the return of confidence in the banking sector, reports Elmundo.com.sv.
The president of the Salvadoran Chamber for the Construction Industry (Casalco), Mario Rivera, reported that credit recovery is also thanks to the industry having approached the banks.
La Hipotecaria landed IDB financing for mortgage loans in El Salvador, Panama and Colombia.
$20 million in loans will help boost loans for low-and middle-income housing to reduce the gap in the housing market.
La Hipotecaria is to get a funding package of $20 million from the Inter-American Development Bank (IDB) to promote mortgage lending for low and middle income classes in El Salvador, Panama and Colombia.
The company Urbánica Desarrollos Inmobiliarios plans to develop an residential project, known as Portal Canarias in a 15.7 hectare area in El Espino.
The project, which includes four residential condominiums, will generate about five thousand jobs both direct and indirect, said Alvaro Barraza, Commercial Manager of the project.
"According to Barraza, Portal Canarias is inspired by the Atlantic archipelago of the same name, and each condominium building - Puerta Gran Canaria, Allegranza, La Palma and Los Faros, aims to meet the needs of different types of families in El Salvador, but gathered together in an environmentally friendly space that will give all residents the opportunity to experience a fusion of nature, urban creativity and security", reported Elsalvador.com.
In El Salvador, clients of the Social Home Fund (FSV) have more buying power as they become exempt from some requirements.
One the requirements that changed was the elimination of the credit authorization agreement for those who can provide a minimum of 30% as a down payment.
German Rivas writes in his article for Laprensagrafica.com: “The credit authorization agreement will also be eliminated for those who can provide a down payment of 20% and have a risk rating of A with the Superintendency of the Financial System, and have at least two credit references from a domestic bank.”
These agents are intermediaries in mortgage management, obtaining advantages regarding both interest rates and contractual terms for their clients.
During the real estate boom in Panama, these intermediaries—people with good connections in the banking and real estate market—had foreign investors, generally from the U.S., as their main clients, assisting them in the process of obtaining mortgages for properties valued at over $200,000.
Profitability drops as asset liquidity increases, but liquidity is what ensures the life of the banking business and their customers' money.
Panamanian banks have not used the extra funds that the financial incentive program (PEF) made available to them in order to stimulate lending. In addition, it must be considered that said funds are very expensive, and they have simply not been needed.
The group proposes that housing and public works be reactivated in order to face the crisis and revive the economy.
Yesterday, the Salvadoran Construction Chamber (Casalco) proposed a preliminary plan (Law of Preferential Interest Rates), which would require $375 million for housing which would be financed by commercial and state banks.
To accomplish this, they proposed that 60% of the amount, that is $225 million, be financed by commercial banks and $150 million by state banks.
Producers Associations in El Salvador expressed concerns about the tightening of credit policies.
The Corporation of Exporters of El Salvador (Coexport) has detected more restrictions for new credit and for refinancing. "The processes are stricter, especially for new clients and those who are in default," said Silvia Cuellar, executive director of Coexport.