SANTO DOMINGO.- ACOPROVI, the Association of Housing Builders and Developers, advocated for the release of the legal reserve requirement, recently ordered by the authorities of the Central Bank of the Dominican Republic, to include housing intended for the middle class, in order to achieve greater access for the population.
“From Acoprovi, we request that the Central Bank authorities not only limit the legal reserve requirement to the aforementioned limit, but also extend it to middle-income housing, because this way more Dominicans will have access, which is ultimately what the government policies and developers and builders are seeking,” explained Annerys Meléndez, president of the entity.
He added that he hopes there will be an expansion of the disbursement because so far only the maximum amount for low-cost housing, which is RD$4,852,211.20, has been released.
He explained that despite the progress being made in positioning low-cost housing, the release of reserves has been "timid," because of the RD$21,424.4 million that were released, only RD$3,735.6 million have been placed.
He praised the release of the legal reserve requirement as a major incentive for low-cost housing, as the resources helped to boost the market position of this type of housing.
The civil engineer assured that the legal reserve requirement eliminated up to 400 points in the interest rate that people would pay when acquiring their home.
Based on statistics from February of this year from the General Directorate of Internal Taxes (DGII), the president of ACOPROVI specified that the sale of low-cost housing units increased by more than 40% above the historical average of approximately 11%.
Challenges of the sector
Meléndez highlighted that the pandemic and the war between Russia and Ukraine have left considerable challenges for the sector because the inflation rate keeps construction materials at very high prices, which has led to an increase in the cost of housing.
He added that this is in addition to some measures that banking authorities took in order to alleviate inflation.
“These events are having a considerable impact, not only on low-cost housing, but on construction in general, because building materials—such as cement, steel, and concrete—make up between 40 and 50 percent of all the inputs used. And these have increased between 50 and 70 percent compared to their pre-pandemic prices, which is one of the biggest challenges facing the construction sector,” he commented.
He said he hopes that the high cost of construction materials will soon begin to decrease, as freight costs, which are the way to transport these supplies, have dropped to pre-pandemic levels.
"Until these types of materials, which represent the majority of construction, decrease in price, we will continue to experience this situation of rising housing prices.".
