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Latin America Investment News on Viva Tropical

Home Ownership Rates Decline in Guatemala

Article Summary:

Home ownership rates are falling in Guatemala as banks refuse to offer financing for homes located in undesirable areas.

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Original Article Text From El Periodico via Google Translate :

Homeownership Rates Fall

he cost of financing for new home purchases have declined slightly in recent months and banks now include the option to fund expansions and second-home ownership (used).

The interest rate to buy a home increased from an average of 13.02 percent to 23.12 percent in the period January 2011 to June this year.

Giovanno Contreras, manager of Grupo Financiero ViviBanco, said that in the case of bonds Development Institute of Insured Mortgages (FHA) transactions in currency rates reach between 7 and 8 percent.

Vendors of Zapote Encinos project, located in zone 2, offering rates of 7 percent with the FHA for a period of 6 months, plus a down payment of 5.1 percent of the amount of housing that can range from Q865 thousand to Q1 one million of real estate 075 000 112 to 156 square meters.

According to the Bank of Guatemala, interest rates for mortgage loans in dollars decreased from 8.5 to 8 percent in the weighted average.

Óscar Sequeira, coordinator of Statistics Construction Chamber of Guatemala (CGC), said that interest rates are down worldwide by the policies pursued by central banks and that has an impact on reducing the level of fees charged for housing finance.

Increased demand
As a matter of Contreras, demand that records the banking system has grown. In June 2011 mortgage loans and Q7.5 billion and accounted for in the first 6 months of this year reach Q8.4 billion. “They have a growth of Q908 million, or 12 percent,” he says.

Outside the framework of FHA, banks offer lower system between 16 and 14 percent for remodeling and home purchases. But he cautions that must be projects or properties located in central areas or outside the red areas, including neighborhoods like El Limon, in zone 18, The Cock, in zone 3, and the Barrio San Antonio, in zone 6, for name a few sectors.

Sequeira said the fastest growing segment of sales is the range between one thousand and Q800 Q500 thousand, but the FHA system projects continue to push sales with double-digit growth.

Uncertainty over new laws
According to Contreras, the new Housing Law and Tax Law Update approved earlier this year, would motivate changes in the market for existing homes.

“The banking system is financing this specialized market and some banks authorize appropriations for housing renovation and expansion,” the banker.

Thus, Sequeira said that can be sold without paying Value Added Tax (VAT) houses not exceeding Q250 thousand, generating new opportunities for funding through the FHA.

It also exempts the payment of VAT for second and subsequent sales of property, and left only the payment of 3 percent in revenue stamps.

But changes to the registration in the Land Registry are causing uncertainty and reducing the number of entries.

Sequeira said he uses three criteria to make the logs, the value of the transaction, the original price in the search and the result of an appraisal.

Link to Original Article:

From El Periodico

Latin America Investment News on Viva Tropical