The Salvadoran Chamber of Construction Industry (Casalco) reported that the portfolio of loans for housing construction experienced a decrease of 15% in 2011, as banks only granted $113.9 million.
At the presentation of an institutional report, the executive director of Casalco, Ismael Nolasco, said the bank had chosen to lend to housing developments for the middle class segment and above, which represented a lower risk. On the other hand, some builders have chosen to develop small projects with their own resources, reported ElSalvador.com.
The decrease in loans to build houses contrasts, paradoxically, with the increase in credit for buying homes, which has grown over the past two years by an average of 44%, according Casalco. From January to December 2011, banks provided $242.5 million for these purposes, which represents an increase of 36%.
Builders have higher expectations for this year, which are based on initiatives promoted by the union, such as the Preferential Interest Law, which is in the hands of the executive for their respective review. "We have great expectations because the law will help people to acquire housing," said the executive.
Source: elsalvador.com
More on this topic
September 2010
Credits for home purchase only rose one percentage point between May and July this year (from 3% to 4%).
This announcement was made by the Salvadoran Construction Chamber (Casalco). Its report adds that construction loans are still static at 4% of all credit granted by the banking sector.
July 2011
Despite some signs of recovery, mainly in public works, the industry continues to stagnate, as shown by credit indicators for construction.
Between January and May 2011, banks lent $7.4 million for housing projects, 73% less than in the same period last year, when loans were for $27.7 million.
May 2010
Low public investment and limited access to credit are the main problems, construction companies say.
Ismael Nolasco, head of the Salvadoran Construction Chamber (Casalco), urged the government to begin as soon as possible a number of construction projects pending execution.
September 2010
Since 2008, more people have applied for loans to buy pre-owned homes than for new ones.
According to data from El Salvador's Social Housing Fund (FSV), in 2006 of 1,520 registered loans, 1,169 were for a new home. In 2008 the trend changed with more mortgage applications for pre-owned houses.
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