An economic slowdown in Honduras in 2024 led to fewer private, commercial, residential, and industrial constructions in cities like Choloma, Villanueva, and Tegucigalpa compared to 2023. Although new businesses and private constructions always emerge in these developing municipalities, the number of projects decreased compared to 2023. Experts point out that despite reducing the number of projects, the investments being made, especially in the Sula Valley, are more costly and require much more money and time.
San Pedro Sula’s Growth in Private Construction
San Pedro Sula, one of the major cities in Honduras, saw a 10.5% growth in private developments. In relation to 2023, there was a 10.5% increase in private construction in San Pedro Sula last year. Last year, 556 new constructions emerged, including 23 industrial warehouses, nine shopping centers and office buildings, 36 commercial centers and supermarkets, 38 commercial businesses, six gas stations and service stations, a church, 421 residential projects, 14 apartment buildings, and eight service buildings.
Project Forecasts for 2025
In 2025, 54 projects are being evaluated for approval in Honduras’ cities. Of these, 47 projects are residential, including houses and condominium towers. “Given the trend in recent years, most construction license applications are expected to focus on family and multifamily housing (including condominiums), as well as the construction of more shopping centers and warehouses,” municipal authorities stated.
Construction Permits in the Central District
The Central District, including Tegucigalpa and Comayagüela, registered 287 fewer constructions in 2024 than in 2023. In 2024, 1,903 construction permits were issued in cities in Honduras, with an investment of 10,300,000,000.00 lempiras. Of the 1,903 projects, 1,465 are single-family homes, 148 commercial premises, 43 office buildings, 37 multifamily buildings, 86 warehouses, 52 roadworks, 47 commercial preliminary projects, four urbanizations, and 21 change of use. In the previous year, 656 projects were pending approval, most of them applications for single-family homes.
Future Construction Growth Expectations
A 30% increase in construction permits is expected by 2025, mainly due to new financing policies established by the central government, which include extended deadlines and lower annual interest rates. “There is an expected growth in apartment projects, which have proven to be a viable option for vertical housing in Tegucigalpa and Comayagüela,” said municipal authorities. With the launch of the new San José dam, urban areas are expected to grow in the area leading to Olancho. Commercial projects will continue to develop as they have been, primarily in the city’s outskirts, in the southern part of the municipality.
Choloma’s Growth in the Residential Sector
Choloma, the most industrialized city in Honduras, is growing in the residential sector with new urban projects and independent house constructions. In 2024, the city council approved the construction of over 400 houses, renovations, fence constructions, extensions, and more than 10 apartments, 10 commercial premises, industrial warehouses, a supermarket, a hardware store, and a gas station. The total revenue from these construction permits in cities in Honduras was 10,090,533.40 lempiras in 2024, a significant increase compared to 6,985,894.09 lempiras in 2023.
Villanueva’s Construction Growth
Villanueva approved 264 construction permits in 2024, with a total income of 9,370,875.12 lempiras. The list includes the construction of 94 houses, 19 annexes, 71 fences/walls, four terraces, 15 commercial premises, five warehouses, 26 apartments, one church, six rooms, six logistics offices, and four manufacturing plants. The city council reported that 147 permits had been issued by June 2023, amounting to more than 3,780,149.91 lempiras.
Economic Slowdown and Challenges for the Industrial Sector
There has been an economic slowdown across several cities in Honduras. Raúl Martínez, a real estate expert, asserted there has been a slowdown in commercial and industrial development in the country. “In the industrial sector, free zones are not growing. There are available spaces in the free zones for companies, especially in the last two years when several companies left the country, which has created availability in industrial parks,” he said. The high land cost in San Pedro Sula and the limited availability in Tegucigalpa restrict their development.
Outlook for Office and Apartment Buildings
However, office and apartment buildings will continue to emerge, particularly in the Industrial Capital. However, Martínez highlights that more than half of them do not yet have permits, meaning they are still in planning or under intention. Martínez pointed out that construction revolves around remittances, which is why many municipalities that previously had little development have been seeing significant growth in recent years.
Private Construction Growth in 2024
According to the results of the Survey on Private Roofed Construction Works (ECOPT) by the Central Bank of Honduras (BCH), during the third quarter of 2024, private construction reached a total of 640.6 thousand square meters, representing an increase of 10.6% (61.6 thousand square meters) compared to the same period in 2023. Within private construction in cities in Honduras, residential buildings remain the primary destination, contributing 54.6% to the total square meters built. Vertical buildings, mainly apartments, stand out, with a 172.6% growth in the third quarter of 2024 compared to the same period in the previous year.
Fewer Projects, More Expensive Construction
“Fewer projects but more expensive,” says Gustavo Boquín, president of the Honduran Chamber of the Construction Industry (Chico). He stated that although fewer projects were built in 2023, higher-value works and additional square meters have emerged, as shown in the ECOPT results. “Right now, in the Sula Valley, no massive urbanizations are being built, but rather apartment towers,” he noted. In 2024, around 18,000 homes were not built in Honduras due to delays in the disbursement of funds from Banhprovi. Only 12,000 houses were erected. Boquín explained that the entire government budget was not executed either, impacting construction.