In a recent social media «Space» session, President Nayib Bukele disclosed the transformative impact of enhanced security conditions on the country, propelling a surge in housing demand. The government, in response to this growing trend, is actively promoting and supporting the construction sector.
The improvement in security conditions, attributed to initiatives like the Plan Control Territorial (PCT), has not only reduced crime rates but has also ushered in economic development across various sectors, particularly real estate. With a decline in criminal activities, there has been a significant rise in the demand for property acquisition among Salvadoran residents, members of the Salvadoran diaspora seeking to return, and even foreigners.
During the Space session on the «X» social network, President Bukele engaged with users from across Latin America. One participant, Ericka Martínez, a Salvadoran residing in California, San Francisco, raised concerns about the escalating housing prices in El Salvador and inquired about potential regulations.
President Bukele acknowledged the remarkable shift in the real estate landscape, describing it as a phenomenon. He highlighted the drastic change from a time when gang dominance rendered properties in «red» zones practically worthless, available for as low as $3,000 but deemed uninhabitable due to associated risks.
With the current improvement in security conditions nationwide, properties are now being valued more accurately, leading to a surge in prices and the emergence of what Bukele referred to as a «real estate bubble.» Despite acknowledging the situation, the government does not plan to implement price controls, fearing it could hinder the sector’s development.
President Bukele emphasized that the administration is actively encouraging new construction to regulate prices through increased supply. The current demand surpasses the available housing stock, turning property sales into a quasi-auction. He stressed that the solution lies in fostering more construction, asserting, «The solution is to wait for these houses to be built, and it’s happening.»
The President pointed out the unprecedented factors driving demand, such as increased tourism, reverse migration of Salvadorans returning home, and the emergence of a new market. According to the Salvadoran Chamber of Construction (Casalco), San Salvador alone has over 49 buildings under construction, mostly high-rise residential projects. Nationally, there are 113 projects in various stages—some under construction, others in the design phase, and some in the approval process.
This dynamism is reflected in the Central Reserve Bank’s growth report, showcasing a 10.6% rise in the construction sector in the third quarter of 2023.
President Bukele expressed optimism about the pressure from growing demand attracting more investment, subsequently leading to increased employment opportunities. The real estate sector currently generates approximately 120,000 direct and indirect jobs, and Casalco anticipates closing figures for the previous year to reveal a substantial $2,100 million in investments. The future looks promising for El Salvador’s real estate sector, with security improvements acting as a catalyst for economic growth and prosperity.