real estate

Construction and real estate have up and down sides

As employment soars in construction, real estate promoters and buyers confront their differences.

LA PRENSA

Going up. Construction workers numbered 130,000 in 2007.971581

Employment in the construction industry in Panama has reached an all time high, but relations between real estate buyers and some developers are problematic.

According to unofficial figures released yesterday by the Cámara Panameña de la Construcción (Capac), the industry directly employed some 130,000 workers as of the close of 2007. It was reported that around 40,000 jobs were filled in the last 10 months.

The president of Capac, Walter Medrano, during his inauguration speech for a second term, estimated that investments during 2007 will exceed $2 billion and that mortgage lending over the last year could reach $1 billion, which reflects the granting of 25,000 mortgages.

"The growth of the industry is also reflected in the substantial increase in the payment of worker-employer contributions to the Caja de Seguro Social, the rise in payments of national and municipal taxes and an increase in the consumption of goods and services to meet the demand of the construction industry," he said.

This reality imposes an obligation on Capac, Medrano added, to act deliberately to reconcile the expectations of progress and development with society's other guiding values.

Medrano and Capac are not entirely happy with the way the way everything is going, however. Capac is especially displeased with the way the Asamblea de Diputados has responded in favor of consumers who complained about what they identified as "abusive clauses" in certain real estate purchase contracts. One such clause allowed promoters to cancel a purchase agreement unilaterally and retain all sums already paid by the buyer. Panama's equivalent of the Consumer Protection Agency has also spoken out in favor of the buyers.

Consequently, Medrano has requested that President Martín Torrijos intervene in the matter, claiming that the new regulations relating to contracts offered at the marketing stage of new developments threaten the continued growth of the industry. A committee of all concerned parties was formed, he said, but while they were analyzing the subject and preparing to make a statement, the Asamblea de Diputados went ahead and approved the changes in the contracts with consulting them.