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Latin America Investment News on Viva Tropical

Here’s Why Housing Prices Are Rising in Nicaragua

Article Summary:

Construction prices per square meter have doubled in Nicaragua in the past five years, an average of 25%, and critics say the high cost of labor, land, and materials are the main driving factors. However, it seems that 2012 was still good for the sector, despite the increase in the value of new homes.

Photo Credit: Nuevo Diario

Original Article Text From el Nuevo Diario via Google Translate :

New Home Prices up 25%

The value of new housing in Nicaragua, with a maximum cost of $ 50,000, increased by 25% in the past five years, due to an increase in the price of building materials, land and fuel, reported President of the Chamber of Builders, Cadur, Atha Alberto Salinas.

He said that the houses that had a cost of U.S. $ 20,000 is now listed at $ 25,000 and those with a value of $ 25,000, are now above $ 30,000.

Atha Salinas said that the homes that are sold more worth between U.S. $ 18,500 and U.S. $ 20,000, which are benefiting from the Act Affordable Housing.

Price per Square Meter of Construction Doubled
For his part, President of the Nicaraguan Chamber of Real Estate Brokers, Canibir, Abraham Blandon said that on average, the cost per square meter of building a house was $ 300 two years ago, but now is U.S. $ 600.

According Blandon, the price depends on the quality construction and finish that has the property.

“That means there is less customer market, because it eliminates the customer price, because you can not pay that amount. Not the same housing (interest) that began with social U.S. $ 14,000, (but) now worth over U.S. $ 20,000, for example, and that leaves you out of the market, “he said.

The real estate business, said Blandon, up positively by the effect of “demand and supply”, which sees a good year for the sector, despite the increase in the value of new homes. The business of the house had its “boom” five years ago, with the launch of the National Social Interest Housing, according to experts.

Materials Price Rises
Construction materials have been mostly an increase, as well as transport costs.

“In 2012 we saw the fuel has been raising his price and that is reflected in the transport of materials, their cost of production to the various projects. Iron, for example, in the last four years has increased in value by at least 25%, likewise particular derivatives “said Atha Salinas.

Other Factors
Moreover, the price of labor also increased, raising the cost of new homes.

The construction sector in Nicaragua employs about 20,000 people, of 627.000 listed in Social Security, according to Central Bank figures.

“The workforce has also experienced significant increases each year by the discussion of the minimum wage and collective agreement we have, ranging between 10% and 15% per year, which has resulted in the last five years cost of housing has increased by roughly 25%, “Atha said Salinas.

Last year, construction workers achieved a 12.5% ​​adjustment in the minimum wage.

For Cadur VP, Alfonso Silva, the adjustment in interest rates charged by banks to extend mortgage credit to customers is another factor influencing the increase, however, are elements that do not affect the placement of homes.

In 2012, according to reports Cadur, placed nearly 4,000 new homes. The latest report of the Central Bank of Nicaragua, BCN, on the situation of private construction noted that residential buildings grew 46.5% in the third quarter last year, compared to the same period of 2011.

“This has raised the interest rate, the amount of the premium, building materials, construction wages according to collective agreements, however, the level of placement did not change and that shows that the effect of economic growth general has shown the country has helped, because despite these increases has kept pace with placement (home), “said Vice President Cadur, Alfonso Silva.

Projects
The Chamber of Builders of Nicaragua executed 43 projects with 12,000 homes and 75% of those homes are priced less than U.S. $ 50,000 per unit, which includes the social interest.

2013 Pivotal Year
The directors of the Chamber of Builders of Nicaragua said that 2013 will be decisive in laying houses, so projected to grow between 12% and 15%, said the organization’s vice president, Alfonso Silva.

“Every year we have been growing at about 500 to 700 homes over which they have built and we expect that to remain the same way,” he said.

For his part, President of Cadur, Alberto Atha, adding that could put about 5,000 homes in 2013, as part of a plan to build in four years 22.000 residential works.

Link to Original Article:

From el Nuevo Diario

Latin America Investment News on Viva Tropical