The Panamanian Chamber of Construction (Capac) held a meeting with promoters and housing developers from various regions of Panama, including the provinces of Panama, Panama West, Chiriqui, Veraguas, Herrera, Los Santos, and Coclé. The purpose of this meeting was to discuss the government's proposal regarding the extension of the Preferential Interest Law at a critical time for the construction sector, which is facing one of its worst crises.
According to Alejandro Ferrer Solís, president of Capac, the current situation, caused by the imminent expiration of the Preferential Interest Law for housing under B/.120,000.00, has resulted in the loss of more than 12,000 jobs, a considerable decrease in municipal taxes, and uncertainty for families whose credits have been rejected, negatively impacting their ability to obtain their own housing.
In this first meeting, there is an effort to address a proposal that reflects the reality of the market both in the capital and in the interior of the country. More meetings are planned where key stakeholders from the banking sector, contractors, suppliers, and other participants related to construction, which represents 15.67% of Panama's Gross Domestic Product (GDP), will join.
The present associations emphasized that the economy of the interior provinces is particularly affected, as construction and real estate activities contribute an average of 22.7% to the regional GDP. The halt in the construction of social housing could cause a significant loss of jobs, considering that the construction sector represents 7.8% of national employment.
In the labor field, a decrease of 7.57% in the number of jobs in the construction sector has been observed between 2023 and 2024. Additionally, formal employment has also fallen by 6.92% compared to August 2023, a situation exacerbated by the strict approval criteria for mortgage loans from state banks.
The Preferential Interest Law has been fundamental for many Panamanian families to acquire their own housing in recent decades. However, the lack of incentives and changes in credit policies have hindered access to decent housing today, highlighting the urgent need to strengthen tools like this law to boost the real estate market and the fiscal stability of the country.
