Housing Deficit in Nicaragua: No End in Sight

The following article , and was translated from Spanish to English by Yancy Rivera.

The housing deficit in Nicaragua has no end. Currently, there is a shortage of 957,000 houses and each year the demand increases by 20,000 units, of which the private and public sector only cover 50%, according to the Chamber of Developers.

Between the private and public sector there are only 10,000 units constructed a year, which is insufficient to meet the demand, announced the president of Cadur, Ricardo Melendez.

The 20,000 homes that correspond with the annual aggregate demand are the result of the formation of new family nucleus'.

We are not yet at the level that we should be constructing annually, that is to say, what the country needs and we are not taking into consideration the deficit which is still untouchable, Melendez mentioned.

Last year, Cadur, through some of their partners, were barely able to place 3,500 homes. For this year-- Melendez added-- they project to sell 500 more houses, 4,000 total.

For 2005 there was a calculated lag of about 400,000 homes. Starting in 2010 the deficit surpassed half a million houses, and kept increasing until it reached the current levels.

The Response

To satisfy this demand there needs to be 647,805 new houses, according to data from the sector.

Additionally, there is an urgent need to improve 309,176 homes that are in poor condition, Melendez emphasized.

To attack the problem, between 2007 and 2011 38,347 homes were constructed. Of these, 19,526 were built by the government, 11,215 by towns, and 7,606 by the private sector, according to data from the Institute of Urban Living.

Until 2016, there are 77,854 residencies projected to be constructed by the public and private sector.

US$45 million dollars of the funds that the Nicaraguan Institute of Social Security injected in the Finance System to give mortgages created a positive effect to dynamize the sector, however they have run dry.

The capital served to to cover a ceiling of 4,800 houses of social interest.

“The positive effect of dynamizing the sector has been done, we’re with funds from the banks, but if you realize the trend of placing houses has not changed, the projects are still being sold”, Melendez stated.


Due to this, the developers are not attending the constructions of social interest, and have been in talks with the government for months looking for an alternative to the problem.

Cadur is asking for a reform to Special Act 677, for the development of housing and the access to social housing, approved in 2009, that jump started the construction and sale of social homes.

The law provides a series of fiscal benefits to homes valued at US$20,000 or less. The developers are asking that the ceiling be raised to US$30,000.

70% of the houses that are being offered through the projects have costs less than US$50,000, at the moment.

“Even if we raise the prices of houses, we can increase construction, so that the subsidies will go to more sectors of the population, not limited to social housing. The subsidy would go to families that earn US$600, US$700, not just US$500”, Melendez mentioned.


Just in 2013 the local financial system allocated US$420 million in mortgage credits, which meant a 15% increase with respect to 2012, signaled Alberto Atha, director of the Chamber of Developers in Nicaragua, Cadur.

For 2014, according to Atha, they expect the mortgage credit to grow 17%.

"We need to construct 7,000 houses a year or 10,000 just in the private sector and we're barely reaching 4,000."

-Ricardo Meléndez, President of Cadur