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Housing Shortage Plagues Nicaragua; 25,000 More Needed Annually

Article Summary:

The housing shortage continues to grow in Nicaragua. Although the Law on Construction of Affordable Housing enabled the construction industry and developers to streamline their business, representatives of both sectors agree that further efforts are mandatory to solve the housing shortage.

Photo Credit: La Prensa Nicaragua

Original Article Text From La Prensa Nicaragua via Google Translate :

25,000 Homes Are Needed Annually

The housing shortage continues to grow in Nicaragua. This is despite the work that the Government and private enterprise have in the past two years with the annual construction of 7,000 to 10,000 homes. This number of houses is insufficient to resolve the nearly 15,000 new families each year in addition to the historical demand for housing, estimated at 700,000.

And although the Law on Construction of Affordable Housing (Act 677, passed in April 2009), has enabled the construction industry and developers raise their heads and streamline their business, representatives of both sectors agree that still requires further impetus to solve this problem poses to Nicaraguan families.
In fact employers estimate that to give a real answer to the housing problem in Nicaragua is needed to build between 15,000 and 25,000 homes annually, or between five thousand and more of the 15,000 houses currently being built.

“If the annual demand ceases to grow and continue to build the number of houses is being done every year, we would need 70 years to supply all the accumulated historic deficit,” said the president of the National Chamber of Construction, Benjamin Spears .

It takes $ 100 million this year
For developers this year that banks aim to provide at least $ 100 million in mortgages to achieve that plan to build 4,000 homes, of which about 400 have already been reserved for one of the four shows that the sector is driving this year .

Vice President of the Chamber of Developers of Nicaragua (Cadur), Alfonso Silva, says that studies the possibility of promoting a market for the sale of mortgages. “We will have a significant package of mortgages in Nicaragua, because we will probably have between 200 and 300 million in mortgage that can package and sell to other markets,” he explains.

The idea of ​​business is to recover the investment in short-term mortgage to obtain greater liquidity and execute new housing projects.

In 2010 the estate developers built about 1,800 homes, in 2011 were about 3,800 and this year is expected 4,000 homes. This means that during the last three years can only respond to a cumulative 9.600 45.000 families that need homes, not including the backlog.

Impossible to solve?
Vice President of the Chamber of Developers of Nicaragua (Cadur), Alfonso Silva, says the problem is that there is a historical shortfall seemingly impossible to solve, because it was three years ago that business was supported by the Government to drive housing program. “We are facing only the need that accumulates each year,” he says.

Within the historical deficit not only are families who need a home, but also those that require funding to improve housing.

“It’s a very difficult challenge to solvent while in Nicaragua is not built public housing policy long term,” he says.

What does it take to build 25,000 homes a year? Families urge for greater access to mortgage credit, meaning that banks relaxed their lending.

In that sense, Silva says at least the law has allowed 677 families with minimum income of 12,000 cordobas pooled to obtain a low-cost house.

According to the Institute of Urban and Rural Housing (INVUR) ​​in 2010 four of the major banks in Nicaragua 1.242 authorized to finance mortgages affordable housing amounting to 23.59 million dollars.

Employers demand, in turn, greater facilities for land banks. “Here in Nicaragua is very problematic all you have to do with the land, municipal permits,” says Spears.

On this issue, Vice President of Cadur warns that since the adoption of the Social Housing Law firms have emerged informally presented projects for the sale of lots, “but does not know what will end.”

Developers also complain because it is costly to assume the costs for infrastructure for housing projects to basic services, such as energy, the structure is then donated to the Natural Gas Company.

Part of the cost of this investment is transferred to the final price of housing, so that the property then it is less accessible for families.

Employers recognize that it has boosted the purchase of houses whose price rises to $ 30.000. This was possible because the government allocated $ 45 million of the Nicaraguan Institute of Social Security for this segment rates Price lowered to eight percent.

Ricardo Melendez, Lacayo Fiallos development manager, acknowledges that five years ago began to develop affordable housing projects, whose initiative was strengthened by the adoption of Act 677.

In the past two years the developer has sold more than 300 houses of this type, which according to Melendez reflects the dynamism that this initiative has pumped into the housing sector “despite the increase in building materials have been climbing.”

Moses McCrea, Rotoplast country manager, says that for now the impact of social housing has not had the effect “expected” in selling construction materials.
The employer believes that the sellers of building materials have the capacity to supply the construction of 25,000 houses per year.

Link to Original Article:

From La Prensa Nicaragua

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