Construction sector in El Salvador projected to grow 18 % by 2024

The growth would be similar to that of 2023, according to Casalco’s president. The investment of the private company, which is around $700 million, is what is driving the sector.

The construction of apartment towers, hotels and shopping centers that continue to emerge in the country make the president of the Salvadoran Chamber of Construction (Casalco), José Velásquez, foresee that the sector will close again with positive numbers this year, very similar to the 18% growth recorded in 2023.

“If you ask us and as we see the activity of our member companies, I can tell you that the behavior is quite similar to last year,” said the union leader.

According to Velásquez, despite the fact that the Volume Index of Economic Activity (IVAE) has shown negative numbers in the last months, “private projects continue and far from growing or slowing down, we see that they are growing”, he affirmed.

However, he explained that this year it is the private sector that is driving most of the investment, as public projects are not yet contributing to economic growth since many of them are still in the initial stages, as is the case of the viaduct of the highway to Los Chorros.

“As soon as this work begins, we will start to see the injection of money into the country’s domestic product,” said Velásquez.

This year, the greatest weight falls on private enterprise, which, according to Velásquez, is very interested in investing, especially in housing projects.

According to his calculations, only in private projects an investment of between $600 and $700 million is estimated, of which the construction of apartments takes the majority of that amount.

“People have a lot of appetite for getting projects off the ground,” he said.

And there is more interest now that there have been changes within the Planning Office of the Metropolitan Area of San Salvador (OPAMSS). 

Luis Rodríguez, the new director of this office, confirmed on Thursday that in the three months he has been with the institution, construction projects with an investment value of $1 billion have already been released and that they are already evaluating other projects that add up to investments of $4 billion, mainly focused on vertical housing.

“Being conservative, we estimate that the investment could be around $4 billion without counting public projects. This is only private,” he said.

Rodriguez said that the released projects had been held up for some years for different reasons, but when they arrived at the institution they were given agility, so that they could begin to be executed as soon as possible and this would also contribute to the economic development of the country.

He mentioned that some of these projects had been under management for up to 12 years, but now, seeing the enthusiasm of the real estate sector, many developers resubmitted their management to have agility in their processes.

Sub-100” housing

Despite the fact that there is a great real estate development, both Rodríguez and Velásquez recognize that the demand for housing at costs below $100,000 has not yet been met.

Velásquez affirmed yesterday that he is still in conversation with the Minister of Housing, Michele Sol, to discuss alternatives for the construction of housing in the “sub 100” category, that is, housing under $100,000.

To this end, Casalco’s president said that issues such as the financing that families could have to access decent houses should also be analyzed.

Velásquez assured that the data on access to housing will be clearer when the data from the Population Census is known, the results of which are expected to be public in 2025.

“We are sure that soon we will begin to see solutions,” he said.

Currently, only in the metropolitan area 40 housing projects are estimated, but at least 60 projects are being considered throughout the country, most of them under the figure of apartment towers.

In fact, there are already some being planned outside the AMSS, in municipalities such as Zaragoza and Soyapango, where developers have begun to offer apartments at more affordable prices than those offered in the metropolitan area of San Salvador, where the price of land is higher.

The architects collective ID Urbe and Regazzoli+RDA have presented 8 proposals to reduce the price of housing, which for now presents offers of more than $100,000 that many families cannot afford.

Source: El Economista