Peru’s housing ministry will send to congress a bill that looks to revitalize its slowing housing and construction sectors.
Details of the legislation have not been made clear, but housing minister Milton Von Hesse has said the bill aims to remove requirements for a down payment on a home mortgage, which prevents the majority of Peruvians who do not earned fixed salaries from buying a home.
The bill provides for a subsidy of up to $5,400 for new and existing homes that meet the Fondo Mivivienda requirements for financing, which include homes valued between $17,000 and $84,000. Officials project the “rent-to-own” program will drive sales of 30,000 homes.
“Growth in the order of 3% is being mentioned but I don’t agree with those projections. I think that with the [economic] dynamism coming in the second quarter, the expansion rate will be closer to 10%,” Von Hesse said.
“The project aims to promote the leasing of residential housing as part of the state’s policy of reducing the qualitative and quantitative housing shortage. That’s why, by including existing homes, everybody benefits,” Peru’s real estate developers’ association manager Enrique Zevallos said.
Von Hesse said the bill has been ready for a couple weeks, but the Tia Maria conflict delayed its approval by the cabinet. He added it will be sent to congress in one week at the latest. Fondo Mivivienda director Gerardo Freiberg estimates that, assuming the law is approved quickly, banks will have new mortgage products ready by September at the latest.
The law also requires local governments to spend 10% of their budgets on water and sewage projects, as well as includes incentives for property formalization.
Homes sales in Peru fell 40% in 2014 from the previous year and Peru’s construction industry forecasts a spike in new homes available for sale this year.
Lo que trae la Ley del Leasing en vivienda (La Republica)
NUEVO CRÉDITO MIVIVIENDA (Fondo Mivivienda)