BRIEFS. finance

Most 2007 mortgages subsidized by government

Eighty-seven percent of all home mortgages taken out in 2007 were subsidized by the government, according to statistics reported by the Cámara Panameña de la Construcción (Capac).

If the Asamblea Nacional approves the proposed Programa de Apoyo al Consumidor (PAC) law, the ceiling on the value of mortgages that the government will subsidize would rise from $62,500 to $80,000. The government would also cover 100 percent of the mortgage interest on homes valued up to $30,000. The measure would apply until the year 2014 and would apply only to new mortgages, not to the refinancing of existing mortgages.

Héctor Alexander, head of the Ministerio de Economía y Finanzas, recently estimated that the subsidy would cost the government $200.8 million over the next six years.

Capac also reported an increase in the acquisition of houses valued at more than $100,000 in 2007 as compared to 2006. The vice president of the real estate group Sucasa, Enrique Asensio, said foreigners buying property in Panama accounts for that growth.

Some experts say the real estate boom has reached its limits, as property costs have been driven up by rising land values, the increased cost of materials and transportation and the lack of infrastructure to support further growth, among other things.